22 Shiv Developers through its partner Sunil bhai Somabhai Ajmer vs. Aksharay Developers & Ors. Civil Appeal No. 785 of 2022 (SC) Date of order: 31st January, 2022 Bench: Dinesh Maheshwari J. and Vikram Nath J.
Partnership Firm – Unregistered Firm – Not barred to file a suit – Where contract in question is not related to business. [Indian Partnership Act, 1932, S. 69(2)]
FACTS
The Appellants, an unregistered partnership firm instituted a suit seeking perpetual injunction and declaration of a sale deed as null and void. The Trial Court rejected the application of the defendants which stated that the suit filed by and on behalf of an unregistered partnership firm which was barred by law.
On appeal, the High Court held that the plaintiff, being an unregistered firm, would be barred to enforce a right arising out of the contract in terms of Section 69(2) of the Partnership Act, 1932 (Act).
HELD
It was held that to attract the bar of Section 69(2) of the Act, the contract in question must be the one entered into by the unregistered partnership firm with a third party and must also be in the course of its business dealings.
Section 69(2) of the Act is not attracted to each and every contract. The sale transaction in question is not arising out of the business of the appellant firm.
The subject suit is 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 present case.
The appeal was allowed.
23 V. Anantha Raju and another vs. T.M. Narasimhan and Ors. AIR 2021 Supreme Court 5342 Date of order: 26th October, 2021 Bench: L. Nageswara Rao J., Sanjiv Khanna J. and B. R. Gavai J.
Partnership Firm – Share of Profits – Disputed – Evidentiary value of Deed is above an oral testimony – Nothing precluded the Defendants from rectifying the deed between 1995 – 2004 – Clauses of Deed would prevail. [Indian Partnership Act, 1932, India Evidence Act, 1872, S. 17, 91 and 92]
FACTS
A Partnership Firm was constituted in the year 1986 vide Partnership Deed dated 30th October, 1992. According to the said deed, the Plaintiff No. 1 was entitled to 50 per cent of the profits provided he introduces a sum of Rs. 50 lakhs as his capital contribution on or before 31st March, 1993 otherwise the same would be only 10 per cent.
Subsequently, the deed was amended in 1995, where the Plaintiff No.1 and his son (Plaintiff No. 2) were both entitled to 25 per cent of the profits, inter alia. The Plaintiffs also filed their Income-tax returns wherein their share is shown as 25 per cent.
In 2004, a dispute arose between the Plaintiffs and the Defendants (Other partners of the Firm). It is the case of the Defendants that the Plaintiff did not bring the said amount of Rs. 50,00,000 on or before 31st March, 1993 and the deed of 1995 has mistakenly mentioned the share of the plaintiffs as 25 per cent each and they rely on their statement made under oath in the affidavit.
The Trial Court had held that the plaintiffs together were entitled to only 10 per cent share in the profits up to 2004, as subsequently they were expelled from the Firm. The appeal against the impugned order of the Trial Court was dismissed by the Hon’ble High Court of Karnataka.
HELD
It was held that the Defendants have not disputed about the reconstitution of the partnership firm by the 1995 Deed. They have also not disputed that in the 1995 Deed, the share of plaintiff Nos. 1 and 2 in the profits and losses of the partnership firm is mentioned as 25% each. The Defendants denying that they had received the requisite sum would have lesser evidentiary value than the Deed of 1995. The contention that the deed of 1995 has mistakenly mentioned the share of the Plaintiffs at 25 per cent each (Total of 50 per cent) cannot be accepted as nothing precluded the Defendants from rectifying the deed between 1995 to 2004.
The appeal was allowed on this point.
24 Ripudaman Singh vs. Tikka Maheshwar Chand (2021) 7 SCC 446 Date of order: 26th July, 2021 Bench: Sanjay Kishan Kaul J. and Hemant Gupta J.
Family Settlement – Exempt from compulsory registration – Where the same to pre-existing rights and no new right is created. [Registration Act, 1908. S. 17]
FACTS
The Plaintiff and Respondent were sons of one late Vijendra Singh. The Appellant-Plaintiff filed a suit for possession in the year 1978 disputing the Will dated 4th December, 1958 executed by Vijendra Singh in favour of the Defendant. The Appellant claimed half share of the land as described in the plaint. During the pendency of suit, a decree was passed on the basis of compromise arrived at between the parties.
In pursuance of the decree so passed, the Plaintiff sought mutation of the half share of the land vesting to him which was allowed by Tehsildar. However, an appeal against the said mutation was disposed of for fresh consideration without granting any opportunity of being heard to the Respondent
The Appellant-Plaintiff thereafter filed an appeal before the Divisional Commissioner. The appeal was dismissed on the ground that the compromise decree in the absence of registration was against the provisions of the Registration Act, 1908. The Appellant-Plaintiff subsequently filed a suit for declaration challenging such order passed by the Commissioner. The suit was dismissed by the Ld. Sub Judge. But the appeal preferred by the appellant was allowed by the Ld. District Judge.
This order was challenged before the High Court. The High Court set aside the judgment and decree passed by the first appellate court and the suit was dismissed on the ground that the land even though being subject-matter of compromise, was not the subject-matter of the suit and therefore the decree required registration under Section 17(2)(vi) of the Registration Act, 1908.
HELD
In the judgment in the case of Bhoop Singh vs. Ram Singh Major (1995) 5 SCC 709 it was held that a decree or order including compromise decree creating new right, title or interest in praesenti in immovable property of value of Rs.100 or above is compulsory for registration. It was also held that where the decree holder has a pre-existing right in the property, that decree does not require registration.
Therefore, the judgment and decree of the High Court holding that the decree requires compulsory registration is erroneous in law. The compromise was between the two brothers consequent to death of their father and no right was being created in praesenti for the first time, thus not requiring compulsory registration. Consequently, the appeal is allowed and the suit is decreed.
25 Moutushi Chakraborty vs. Manju Deb (Chakraborty) AIR 2021 Tripura 40 Date of order: 23rd April, 2021 Bench: S. Talapatra J. and S. G. Chattopadhay J.
Hindu Law – Maintenance – Daughter from second marriage entitled to share in pension of her deceased Father – ‘Estate’ includes pension. [Hindu Adoption and Maintenance Act, 1956, S. 22, 23]
FACTS
The Appellant is the daughter of Mr. Narayan Chakraborty from his second marriage with Smt. Karuna Chakraborty. The Respondent is the first wife of Mr. Narayan Chakraborty. The lower Court had held that Smt. Karuna Chakraborty cannot claim any maintenance as she was not legally married to Mr. Narayan Chakraborty. However, there cannot be any dispute that the appellant has a right over the property/estate of the deceased for all purposes.
The Appellant and her mother filed a petition seeking maintenance from the respondent who is in receipt of family pension for the death of Mr. Narayan Chakraborty.
HELD
The word ‘estate’ cannot be given a narrow definition for purpose of Hindu Adoption and Maintenance Act. The family pension is no doubt an ‘estate’, which has been acquired through the deceased as pension is an estate secured on putting the definite period of service. Thus, the dependents have the right to claim maintenance from the heirs of the deceased. The discretion to deny the maintenance under Section 23 of the Hindu Adoption and Maintenance Act, 1956 is confined to determining the quantum of the maintenance, not to whether the maintenance should be granted or not.
The appeal was allowed
26 Master M. Yashas (Minor) vs. Nil AIR 2021 Karnataka 198 Date of order: 23rd April, 2021 Bench: B. V. Nagarthna J. and J. M. Khazi J.
Property of Minor – Parents seeking permission to sell – Not for the minor’s necessity – Parents can’t dispose minor’s property to overcome their financial problems. [Hindu Minority and Guardianship Act, 1956, S. 8]
FACTS
The petition was filed by the appellant, mother of the minor child aged about twelve years under Section 8(2)(a) of the Hindu Minority and Guardian ship Act, 1956 (Act), seeking permission to sell the property standing in the name of her minor son and to use a portion of the sale proceeds to the tune of Rs. 15,00,000 for use of the minor son for the purpose of meeting his day-to-day expenses, school expenses, to tide over the financial crisis of the parents etc., and to deposit the balance sale proceeds in the name of her minor son. The trial Court by impugned order dated 28th January, 2021 has dismissed the petition.
HELD
As per Section 8(4) of the Act, the Court may grant permission to alienate the minor’s property only for his legal necessity or benefit to the estate.
In the present case, petitioner/appellant is seeking permission to sell the petition schedule property belonging to minor child not for his legal necessity or benefit to the estate, but to tide over the financial crisis faced by her and her husband.
Being the parents and natural guardians of the minor child, it is the duty and responsibility of petitioner/appellant and her husband to take care of him including his education and other expenses. In order to overcome their financial crisis, they cannot dispose of the minor’s property. The legal necessity of the minor does not include the necessity of the guardian or any other person even in the face of a pandemic like Covid-19. Certainly, the intended alienation of the property is not for the benefit to the estate of the minor.
The appeal was dismissed.
