Ramdas s/o Late T.K. Balan and others v. Geetha @ Sangeetha Rajesh, Shobhana, Dayanandan and others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.ABRAHAM MATHEW TUESDAY, THE 11TH DAY OF FEBRUARY 2014/22ND MAGHA, 1935 FAO.No. 236 of 2013 () ----------------------- AGAINST THE ORDER/JUDGMENT IN I.A.NO.8228/2012 IN OS 1693/2012 of PRL.SUB COURT,THRISSUR APPELLANT(S/RESPONDENT 1,3,4,5 & 6,/DEFANDANTS 1,3,4,5 & 6.: --------------------------------------------------------------------- 1. RAMDAS S/O.LATE T.K.BALAN, THTTIPARAMBIL HOUSE PERUMMBPULLI DESOM, CHEVOOR VILLAGE, THRISSUR TALUK. 2. JAYALATHA W/O.DAYANANDAN, THOTTIPARAMBIL HOUSE, VALLACHIRA. 3. NIKHIL CHAKRAVARTHY S/O.DAYANANDAN, THOTTIPARAMBIL HOUSE, VALLACHIRA. 4. NITHUN CHAKRAVARTHY S/O.DAYANANDAN, THOTTIPARAMBIL HOUSE, VALLACHIRA. 5. SARASWATHY (WRONGLY SPELT AS SAASWATHY IN THE IMPUNGED ORDER) D/O.T.K.BALAN, THTTIPARAMBIL HOUSE, PERUMMBPULLI DESOM CHEVOOR VILLAGE, THRISSUR TALUK BY ADVS.SRI.K.JAYAKUMAR (SR.) SRI.K.S.BHARATHAN RESPONDENT(S):PETITIONERS & 2ND RESPONDENT/PLAINTIFFS & 2ND DEFENDANT ---------------------------- 1. GEETHA @ SANGEETHA RAJESH, AGED 43 YEARS D/O.LATE T.K.BALAN, THOTTIPARAMBIL HOUSE, W/O.RAJESH 560/1, DHANALAKSHMIPURAM, A3 AKASH HOMES, GOLDEN ENCLAVE, TRICHI ROAD COIMBATORE-5. 2. SHOBHANA, AGED 51 YEARS D/O.LATE T.K.BALAN, THOTTIPARAMBIL HOUSE W/O.SHAYAM T.G., D2-9, KASILWALPPORVA OPP.AIRPORT, CHIKALTHANA, AURANGABAD MAHARASHTRA-44 00 01. 3. DAYANANDAN, AGED 53 YEARS S/O.T.K.BALAN THOTTIPARAMBIL HOUSE VALLACHIRA-680 562. R BY SRI.K.V.SOHAN THIS FIRST APPEAL FROM ORDERS HAVING BEEN FINALLY HEARD ON 31-1-2014, THE COURT ON 11/2/2014 DELIVERED THE FOLLOWING: ## **T.R.RAMACHANDRAN NAIR & K. ABRAHAM MATHEW, JJ.** **- - - - - - - - - - - - - - - - - - - - - - - - - -** ## **F.A.O.No.236 of 2013** **- - - - - - - - - - - - - - - - - - - - - - - - - -** ## **DATED THIS THE 11TH DAY OF FEBRUARY, 2014** ## **JUDGMENT** ## Ramachandran Nair, J. The appellants herein are defendants 1, 3, 4, 5 and 6 in O.S. No.1693/2012 on the file of the Principal Sub Court, Thrissur, who are respondents 1, 3, 4, 5 and 6 in I.A. No.8228/2012. The prayer in the said application was to grant a temporary injunction which stands allowed by the impugned order. 2. On an earlier occasion the said application was dismissed by the trial court from which F.A.O.No.32/2013 was filed by the plaintiffs/petitioners before this Court. After the said order was set aside the matter was sent back to consider certain aspects, viz. as to whether plaint B schedule item No.2 is a partnership asset and if so, whether that could be brought under the canopy of the suit for partition. 3. We heard learned Senior Counsel Shri K. Jayakumar and Shri K.S. Bharathan, for the appellants and Shri K.V. Sohan, learned counsel appearing for the respondents. FAO No.236/2013 -2- 4. The suit O.S. No.1693/2012 is one for a declaration that the wills mentioned in the plaint executed by Shri T.K. Balan, late father have no legal force and for partition of plaint A, B, C and D schedule properties. The plaintiffs are daughters of deceased Balan and defendants 1 and 2 are his sons and the 7[th] defendant is their mother. The third defendant is the wife of defendant No.2 and defendant Nos.4 and 5 are sons of the second defendant. The sixth defendant is another daughter of deceased T.K. Balan. 5. While inviting our attention to the schedule of the plaint, learned Senior Counsel for the appellants submitted that partition is sought in respect of a property belonging to a partnership firm, viz. M/s. Swamy Clay Works including the buildings situated therein. The partners were deceased Balan and the first appellant. It is submitted that the reliefs thus sought for in the plaint cannot at all be granted and therefore the interim injunction granted by the impugned order cannot be sustained. Learned Senior Counsel relied upon the decisions of the Apex Court in **Addanki Narayanappa v. Bhaskara Krishnappa** (AIR 1966 SC 1300), **Sunil Siddharthbhai v. Commissioner of Income Tax, Ahmedabad, Gujarat** {(1985 ) 4 SCC 519}, **S.V. Chandra Pandian and others v. S.V.Sivalinga** FAO No.236/2013 -3- **Nadar and others** {(1993) 1 SCC 589}, **Nagindas Ramdas v. Dalpatram** (AIR 1974 SC 471) and **Margaret Almeida and others v. Bombay Catholic Cooperative Housing Society Limited and others** {(2013) 6 SCC 538}, in this context. 6. Learned Senior Counsel explained that as far as the partnership property is concerned, it is settled law that a partner is only entitled for a share in the money on dissolution. It is submitted that the following principle is relevant here:- “Whatever may be the character of the property which is brought in by the partners when the partnership is formed or which may be acquired in the course of the business of the partnership, it becomes the property of the firm and what a partner is entitled to is his share of profits, if any, accruing to the partnership from the realisation of the property, and upon dissolution of the partnership to a share in the money representing the value of the property” which has been explained by the Apex Court in **Addanki Narayanappan's case** (AIR 1966 SCC 1300). In that view of the matter, learned Senior Counsel submits that in a suit for partition of the properties, as against the properties of the partnership, the injunction granted is liable to be vacated. It is submitted that the law is well FAO No.236/2013 -4- settled, as held by the Apex Court in **Margaret Almeida's case** {(2013) 6 SCC 538}, that under Order 39 Rules 1, 2 and 4 of C.P.C., where an interim order of injunction is sought in respect of the property described therein, the party seeking injunction must have proprietary interest in the subject matter of dispute. As far as the reliefs sought by the plaintiffs are concerned, they have sought partition of partnership properties by metes and bounds. In that view of the matter also, learned Senior Counsel submitted that a temporary injunction ought not have been granted by the trial court. 7. While replying to the above arguments, Shri K.V. Sohan, learned counsel for the respondents submitted that there were only two partners and on the death of Shri T.K. Balan, the partnership has been dissolved. It is in such a contingency injunction has been granted in order to preserve the properties and for restraining the parties from further encumbering or inducting third parties, etc. The property is to be preserved, as the main relief sought for is one for partition. It is further submitted by the learned counsel for the respondents that going by the alleged will executed by deceased T.K. Balan, there is a bequest in favour of the first defendant of the partnership property. The first defendant is now claiming the said FAO No.236/2013 -5- property as his own. Such being the position, it is submitted, on the strength of various authorities, that as the firm stands dissolved, the first defendant cannot be heard to say that the property still retains the character of partnership property. 8. The conclusions of the trial court as is clear from the order, can be summarised as follows: (a) In the light of the contentions by both sides, the genuineness of the will is one of the material disputes which has to be decided after a full-fledged trial. As the plaintiffs have averred in the plaint and in the affidavit about the suspicious circumstances about the will, those will have to be erased by the propounder of the will during trial and therefore they have made out a prima facie case in favour of them. (b) On the question whether in the absence of grant of temporary injunction, the plaintiffs will suffer irreparable loss and injury, the court was of the view that since the partition is sought of the property scheduled, and if they are allowed to be alienated and if it is finally found that the plaintiffs are entitled to get the relief, FAO No.236/2013 -6- then they will have to continue their fight with third parties. Therefore, it was held that unless injunction is granted, the plaintiffs will be put to irreparable loss and injury. (c) As far as the plea that item No.2 in plaint B schedule properties being a partnership property is not liable for partition is concerned, it is found in para 12 that in the partnership property of M/s. Swamy Clay Works only the deceased T.K. Balan and the first appellant herein alone were partners. The share of deceased T.K.Balan in the said partnership firm and plaint B schedule Item No.1 have been bequeathed to the first appellant. Now he is claiming the entire share in the partnership firm which is being disputed by the plaintiffs. Therefore, the share of deceased Balan in the partnership again will come under the disputed property. The accounts of the partnership have not been settled. Therefore, if the property, viz. item No.2 in plaint B schedule is excluded from the scope of injunction and if third parties are inducted by way of alienation or mortgage, then the plaintiffs will have to fight out the matter again. Reliance was placed on Section 42 of the Partnership FAO No.236/2013 -7- Act and Clause 11 of the partnership deed. The balance of convenience was also in favour of the plaintiffs. 9. The death of a partner has resulted in the dissolution of the firm which cannot be disputed. There were only two partners, viz. deceased Balan and the first respondent. In the decision relied upon by the learned Senior Counsel for the respondent, viz. **Karunakaran v. Krishnan** (1988 (2) KLT 747) in para 8 it has been held as follows: “8 . Though a firm as such has no legal existence, the partners can sue or defend any suit in respect of immovable properties of the partnership even during the subsistence of the firm. When a firm is dissolved, there is no partnership in existence. So, it cannot be said that the partnership continues to be the owner of the immovable properties or the dissolved firm. Such properties cannot be treated as nobody's properties subsequent to the dissolution. The partners of a dissolved firm cannot have the status of partners subsequently. Then, who will protect the properties of the dissolved firm. There can be no doubt that the partners of the dissolved firm alone have the right and interest to do all things necessary for the protection of such properties. As the partners have interest in the properties of the firm, which of course is subject to the claims of the creditors of the firm, they are entitled FAO No.236/2013 -8- to resort to any legal proceedings for the protection of such properties. Otherwise the properties would be exposed to the peril of being destroyed by trespass or mischief or acts of waste committed by strangers. Whatever be the restrictions of the partners qua the property of the partnership during the subsistence of the firm, an erstwhile partner is not subject to such restrictions subsequent to the dissolution of the firm.” Therefore, it is clear that the partnership cannot be stated to be the owner of the immovable properties after dissolution of the firm. Such is not the case of the appellants also as they are relying upon the clauses in the will to claim this item also as exclusively one belonging to the first appellant. Therefore, unlike a case where the property continues to be of the firm, here the position is different. 10. Learned counsel for the respondents explained that already an application for amendment has been filed to incorporate certain amendments with regard to the description of properties which belonged to the partnership. It is submitted by the learned Senior Counsel for the appellants that this Court will have to consider the matter in the light of the averments now available in the plaint. FAO No.236/2013 -9- 11. Arguments have been raised by the learned counsel for the respondents to the effect that the remaining partner, even after dissolution, will hold the property in trust and in that context reliance is placed on the decision of the Madras High Court in **Kasi Alias Alagappa Chettiar And....v. Rm. A. Rm. V. Ramanathan Chettiar** {(1949) 1 MLJ 298}. 12. Learned Senior Counsel appearing for the appellant relied upon the decision of the Apex Court in **Chennuru Gavararaju Chetty v. Chennuru Sitaramamurthy Chetty and others** (AIR 1959 SC 190) to counter the above argument. 13. Both sides relied upon various provisions of the Partnership Act to advance their respective arguments. Learned Senior Counsel Shri K. Jayakumar submitted that in the absence of a suit on accounts, the pleas of the plaintiffs cannot be sustained. It is answered by Shri K.V. Sohan, learned counsel for the respondents by submitting that in any view of the matter, the injunction granted is not unsustainable. 14. As far as the above aspect is concerned, we are of the considered view that in the peculiar facts of this case, the crucial question will be to consider the character of the property, in the light of the specific terms of FAO No.236/2013 -10- the will executed by the deceased Balan bequeathing his share and interest in the property to the first respondent. It is clear from the counter affidavit filed before the court below by the defendants that they are raising a claim that item 2 in plaint B schedule property exclusively belongs to the first appellant herein, in the light of the stipulations in the will and it is their contention that the share of late Shri Balan has devolved upon the first appellant by virtue of the will. As rightly found by the court below, since the plaintiffs have disputed the genuineness of the will and there are certain averments in the plaint which have been advanced in that context, it will be for the propounder of the will to disprove all those at the trial. But in the meanwhile, the property will have to be preserved, as otherwise, if they are encumbered or alienated, it may cause difficulty to the plaintiffs. If third party interests are created, being a suit for partition, a further round of litigation may be the result. 15. We are not going deep into the said controversy, since according to us, in the light of the fact that the firm was dissolved on the death of Shri T.K. Balan and the property has ceased to be the partnership property in the light of the fact that the partnership cannot be said to be the owner of the FAO No.236/2013 -11- immovable property, the balance of convenience is in favour of the the plaintiffs to get an order of injunction as sought for. The situation is different from a case where the partnership is continuing and the partnership holds the property of the firm. 16. One of the decisions brought to our notice by the learned Senior Counsel for the appellants, is that of a learned Single Judge in **Vironica and others v. Philip and others** (1975 KLT 182). There also, the partnership was dissolved on the death of a partner and the period of limitation for filing a suit by the legal representatives of the deceased partner for partition of the property and accounts of income was the issue considered. This Court was of the view that neither during the existence of the partnership nor after its dissolution are partner's co-owners or joint owners of the partnership assets. The firm having dissolved, their right was only to seek a settlement of accounts and claim a share in the assets after satisfying the debts and liabilities of the firm. But herein, as we have already noticed, the will claimed by the appellants herein has intervened and the partnership property is now claimed to be that of the first appellant exclusively. Therefore, on facts, the situation is different from the one FAO No.236/2013 -12- discussed in the above quoted case. For all these reasons, we find no reason to interfere with the order impugned at this stage and the appeal is hence dismissed. No costs. **(T.R.RAMACHANDRAN NAIR, JUDGE)** **(K. ABRAHAM MATHEW, JUDGE)** **kav/**