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WHETHER THE PLAINT CAN BE REJECTED IF RELIEFS CLAIMED IN IT CANNOT BE GRANTED IN LAW

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WHETHER THE PLAINT CAN BE REJECTED IF RELIEFS CLAIMED IN IT CANNOT BE GRANTED IN LAW
By: Mr.M. GOVINDARAJAN
October 8, 2021
All Articles by: Mr.M. GOVINDARAJAN       View Profile
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In a civil suit plaint is filed before the Court with certain prayers.  The prayers sought for by the plaintiff should be according to the law and be grantable.  If the prayer in the plaint cannot be granted then such a suit is liable to be dismissed in limineIf in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11(d), the court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted as held in DAHIBEN VERSUS ARVINDBHAI KALYANJI BHANUSALI (D) THR. L. RS. AND ORS. [2020 (7) TMI 786 - SUPREME COURT]

The power conferred on the court to terminate a civil action is, however, a drastic

one, and the conditions enumerated in Order 7 Rule 11 are required to be strictly adhered to.  A duty is cast on the court to determine whether the plaint discloses a cause of action by scrutinizing the averments in the plaint read in conjunction with the documents relied upon, or whether the suit is barred by any law.

The Supreme Court, in T. ARIVANDANDAM VERSUS T.V. SATYAPAL & ANOTHER - 1977 (10) TMI 116 - SUPREME COURT held that reading of the averments made in the plaint should not only be formal but also meaningful. If clever drafting has created the illusion of a cause of action, and a meaningful reading thereof would show that the pleadings are manifestly vexatious and meritless, in the sense of not disclosing a clear right to sue, then the court should exercise its power under Order VII Rule 11 of CPC.    Such a suit has to be nipped in the bud at the first hearing itself.

In RAJENDRA BAJORIA AND OTHERS VERSUS HEMANT KUMAR JALAN AND OTHERS [2021 (10) TMI 249 - SUPREME COURT] a partnership firm namely ‘Soorajmull Nagarmull’ was constituted under a Deed of Partnership dated 06.12.1943 with 9 partners of which none of them is alive.  Before the Single Judge of Calcutta High Court the plaintiffs filed a suit with the prayer-

  • Decree for declaration that the plaintiffs along with the defendants are entitled to the assets and properties of the firm ‘Soorajmull Nagarmull’ as the heirs of the original partners of the reconstituted firm under the partnership deed dated 6th December, 1943, in the share of the said original partners;
  • Decree for declaration that the plaintiffs along with the defendants are consequently entitled to represent the firm in all proceedings before the concerned authorities of the State of Bihar for the acquisition of its Bhagalpur land;
  • Decree for perpetual injunction restraining the defendant No.1 or any of the other defendants from in any manner representing or holding themselves out to be the authorized representative of the firm or the repository of all its authority, moneys assets and properties or from seeking to represent the firm in its dealings and transactions in respect of any of its assets and properties including the acquisition proceeding of the firm's Bhagalpur land or from receiving any monies on behalf of the firm, whether on account of compensation for its Bhagalpur land or otherwise;
  • Decree for mandatory injunction directing the defendant No. 1 to disclose full particulars of all assets and properties of the firm, full particulars of all its dealings and transactions including any dealing or transaction concerning any asset or property of the firm, and full accounts of the firm for the purpose of its dissolution;
  • Decree for the dissolution of the firm Soorajmull Nagarmull and for the winding up of its affairs upon realizing the assets and properties of the firm, collecting all moneys due to the firm, applying the same in paying the debts of the firm, if any, in paying the capital contributed by any partner and thereafter by dividing the residue amongst the heirs of the original partners in the shares to which they were entitled to the profits of the firm in terms of the Partnership Deed dated 06.12.1943.

The plaintiff Nos. 1, 2 and 3 are the sons of Chiranjilal Bajoria, expired on 31.12.1981.   Plaintiffs 4 and 5 are the sons of Diokinandan Jalan, expired on 12.07.1997.  The plaintiff No. 6 is the son of Mohan Lal, expired on 01.05.1982.  The defendants are the legal heirs of the other original partners in the partnership firm.  The defendants filed two applications against the plaint seeking dismissal of suit or rejection of the plaint on the ground that the plaint does not disclose any cause of action and the relief claimed could not be granted.   The suit is also barred by limitation.  The Single Judge dismissed the applications filed by the defendants.  The defendants filed appeal against the order of Single Judge before Division Bench of the High Court, Calcutta.  The Division Bench allowed the appeal and rejected the plaint in original suit.  However the Division Bench held that it would not preclude the plaintiffs from presenting a fresh plaint in respect of the same cause of action.

Against this judgment the appellant filed the present appeal before the Supreme Court.  The appellants submitted the following before the Supreme Court-

  • The Division Bench of High Court of Calcutta has grossly erred in allowing the appeals and reversing the well-reasoned judgment and order passed by single Judge of High Court of Calcutta.
  • The Single Judge, after reading the averments in the plaint, had rightly come to the conclusion that the plain discloses cause of action, and as such, could not be rejected under Order VII of Rule 11 of CPC.
  • The Division Bench has almost conducted a mini trial to find out as to whether the relief as claimed in the plaint could be granted or not.
  • Such an exercise is impermissible while considering an application under Order VII Rule 11 of IPC.
  • The power conferred on the Court to terminate a civil action is a drastic one.  Such power cannot be exercised routinely.
  • For finding out as to whether the cause of action exists or not, it is necessary to read the averments made in the plain in their entirety and not in piecemeal.
  • The impugned judgment and order is not sustainable and is liable to be set aside.

The respondents submitted the following before the Supreme Court-

  • If the averments in the plaint were read in juxtaposition with the provisions of sections 40, 42, 43, 44 and 48 of the Indian Partnership Act, 1932 read with clauses in the Partnership Deed, it would reveal that none of the reliefs, as claimed in the plaint, could be granted.
  • The plaintiffs were not the partners and as such the suit at their instance was not tenable.
  • If the reliefs, as sought in the plaint, could not be granted, then only the option available to the court is to reject the plaint.

The Supreme Court analyzed the following provisions of the Partnership Act-

  • Section 40 – Dissolution by agreement;
  • Section 42 – Dissolution on the happenings of certain contingencies;
  • Section 43 – Dissolution by notice of partnership at will;
  • Section 44 – Dissolution by Court.

Clauses 4 of the partnership deed provides that upon the death of any partner the partnership shall not be automatically dissolved but the surviving partners may admit the legal representative of the deceased unto the partnership by mutual consent.

Clause 6 of the Partnership deed provides that In case of death of any partner or retirement during the continuance of the partnership shall be deemed to exist only up to to the end of the accounting period of the year during which the death or retirement occurs and the estate of the deceased partner or the retiring partner shall be entitled to receive and be responsible for all profits and losses of the partnership up to the end of the accounting period as the case may be.

Clause 7 of the Partnership deed provides that the said parties hereto hereby mutually covenant and agree that they will carry on the said business in partnership until dissolution under and in accordance with the provisions and stipulation hereinbefore stated or contained in the said Indenture dated the 1st day of September, 1938 so far as the same respectively are now subsisting and capable of taking and are applicable to the altered circumstances hereinbefore appearing.  And any dispute in relation to the said partnership shall be decided by Arbitration according to the provisions of the Indian Arbitration and for that purpose each of the disputing parties may nominate one Arbitrator Provided. However that none of the parties hereto shall at any time is entitled to apply to any Court of law for the dissolution of the partnership or for appointment of a Receiver over the partnership or any portion of its assets.

The Supreme Court observed that the case of the plaintiffs is that the accounts of the partnership firm have not been finalized and that the share of the profits of the partnership firm has not been paid to them.  The defendants are seeking to represent the partnership firm to the exclusion of the plaintiffs and that the defendants are siphoning off funds of the partnership firm.  The defendants are seeking to represent the partnership firm to the exclusion of the plaintiffs and that the defendants are siphoning off funds of the partnership firm.  The plaintiffs along with the defendants are entitled to the assets and properties of the partnership firm as legal heirs of the original partners of the partnership firm.

The Supreme Court considered the question in this case is as to whether the reliefs as claimed in the plaint by the plaintiffs could be granted or not.   The Division Bench of the High Court has elaborately considered the issue.  The High Court held that-

  • The partners of a firm are entitled only to the profits of the firm and upon dissolution of the firm they are entitled to the surplus of the sale proceeds of the assets and properties of the firm, if any, after meeting the liabilities of the firm, in the share agreed upon in the partnership deed.
  • The partners do not have any right, title or interest in respect of the assets and properties of a firm so long as the firm is carrying on business.
  • The plaintiffs as legal heirs of some of the original partners cannot maintain any claim in respect of the assets and properties of the said firm.  Their prayer for declaration of co-ownership of the assets and properties of the said firm is not maintainable in law.
  • The second prayer in the plaint is for a declaration that the plaintiffs along with the defendants are entitled to represent the firm in all proceedings before the concerned authorities of the State of Bihar for the acquisition of its Bhagalpur land.
  • The framing of this prayer shows that this is a consequential relief claimed by the plaintiffs which can only be granted if the first prayer is allowed.
  • Therefore the prayer of the plaintiffs cannot be granted as per law.

The Supreme Court is in agreement with the findings of the High Court.   The Supreme Court came to the conclusion that the reliefs as sought in the plaint cannot be granted.  The Supreme Court dismissed the appeal.

 

By: Mr.M. GOVINDARAJAN - October 8, 2021

 

 

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