RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014

**==> picture [483 x 683] intentionally omitted <==** **==> picture [483 x 471] intentionally omitted <==** **==> picture [483 x 689] intentionally omitted <==** **==> picture [483 x 419] intentionally omitted <==** **==> picture [483 x 636] intentionally omitted <==** **==> picture [483 x 384] intentionally omitted <==** **==> picture [483 x 627] intentionally omitted <==** **==> picture [483 x 343] intentionally omitted <==** ## **SATHISH NINAN, J. = = = = = = = = = = = = = = = = = = RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014** **= = = = = = = = = = = = = = = = = = Dated this the 28[th] day of June, 2019** ## **J U D G M E N T** Since a common thread runs through all these appeals, they are being heard and disposed of together. RFA 247/14 arises from OS 293/12, RFA 827/10 arises from OS 181/07, RFA 238/14 arises from OS 238/12. The subject matter involved in the three appeals is a theatre with the appurtenant land. RFA 96/2012 arises from OS 497/06 in which the subject matter involved is a shopping complex with the appurtenant land. 2. Late Alikunju left behind his wife Asuma Beevi, five daughters and one son. They executed Partition Deed No.291/03. Schedule III to the said deed was allotted jointly to the share of the five RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 2 :- daughters. Schedule III consisted of four items. Item no.1 and 4 were agricultural properties, item no.2 is the theatre with the land having an extent of 54.90 ares, and item no.3 is the shopping complex with the land having an extent of 14.80 ares. 3. Pursuant to the partition, the five sisters executed a Deed of Partnership dated 28.01.03, for management of the properties obtained under the partition. These facts are not in dispute. 4. It is the contention of all the parties except one of the sisters – Zeenath, that an agreement for sale was entered into by the five sisters in favour of one Sirajudheen who is the first defendant in OS 293/12. According to Sirajudheen, pursuant to the said agreement for sale, the said Zeenath executed Sale Deed No.825 RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 3 :- dated 15.03.06 in his favour whereunder the[1] /5[th] share of Zeenath over the theatre and the property was conveyed in his favour. OS 293/12 (originally filed as OS 390/06 before the Sub Court, Kollam) was filed by Zeenath against Sirajudheen, the vendee under the sale, for the relief of cancellation of the Sale Deed and against trespass. She also filed OS 238/12 (originally filed as OS 534/06 before the Sub Court, Kollam) against her other four sisters as defendants for prohibitory injunction not to oust her from the management of the cinema theatre of which she is a partner. 5. The four sisters filed OS 181/07 against Sirajudeen and Zeenath as defendants, for partition of[4] / 5 shares over the theatre and the land. They also filed OS 497/06 against Zeenath for partition of[4] / 5 shares over the shopping complex and the RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 4 :- land. 6. The suits for partition filed by the four sisters were decreed, and the suits filed by Zeenath seeking to set aside the Sale Deed and also for prohibitory injunction, were dismissed, against which these appeals by Zeenath. 7. Heard learned counsel on either sides. 8. The common issue that arises for determination in these appeals is regarding the character of the subject matter viz. the theatre with the land and the shopping complex with the land after the five sisters entered into the partnership arrangement; whether the properties obtained by them under the partition partake the character of a partnership asset since the formation of the partnership. A property can be brought in as a partnership asset expressly or RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 5 :- impliedly by conduct. [See Karunakaran v. Krishan 2007 (1) KLT 243)] . The mere fact that the separate properties of the partners are used for the business of the partnership firm, does not entail a presumption that it has been brought in as a partnership asset. If the property has not been expressly brought in, then whether it has been impliedly brought in as a partnership asset depends on the facts of each case, and has to be determined based on the evidence and circumstances. In determining the same, the intention of the parties, as revealed by their conduct, would be significant. [See George V.J. and Ors. v. V.V.George and Ors. 2010 (2) KLT 692 and Arjun Kanoji Tankar v. Santaram Kanoji Tankar 1969 (3) SCC 555 ]. RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 6 :- ## 9. Clause-3 of the partnership deed reads thus:- “The business of the Partnership shall be that of running a Cinema Theatre, Shopping complex, Rented houses and Agricultural properties. But the partners may be mutual agreement in the interest of the partnership shall carry on any other business allied thereto or otherwise.” 10. It is to be noticed that the cinema theatre, shopping complex and agricultural properties are the assets which belonged to them jointly as obtained under the Partition Deed. Therefore, the partnership has been constituted essentially for the purpose of managing the assets obtained by them under the partition. Managing a property by a firm need not necessarily mean that the property is a partnership asset. The partnership could very well be formed solely for the purpose of management, retaining the title over the property which is being managed, with the individual owners. RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 7 :- ## 11. One of the clauses of the deed of partnership reads thus:- “The partners shall bring in the capital contribution equally as and when required and on such terms and conditions as may be by mutually agreed upon by the partners.” The partnership deed does not give any indication whether the properties have been brought in as partnership asset. 12. At this juncture, Exts.B1 and B2 Sale Deeds dated 10.11.04 and 17.01.04 respectively assume much significance. Those are sale deeds executed jointly by the five sisters in respect of item nos.1 and 4 properties obtained by them under Schedule III to the Partition Deed. Admittedly they are executed after the formation of the partnership. As noticed supra, the partnership deed relates to management of all the properties including the agricultural properties. In Exts.B1 and B2, the sisters are described as co-owners of the property. If the properties were brought in as RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 8 :- partnership assets, the same would have been referred to in Exts.B1 and B2 and the documents would have been executed in that capacity. The positive assertion in Exts.B1 and B2 as co-owners, without any reference to the partnership, leads to an inference that the parties did not intend to and had not brought in the properties as partnership assets. This is further fortified by Exts.B23 letter dated 12.03.03 issued by the five sisters together to the Catholic Syrian Bank regarding payment of rent, asserting their joint ownership without reference to the partnership. No documents relating to the assets and liabilities of the firm are produced to evidence that the properties have been treated as a partnership asset. No documents indicating that the properties were treated as partnership asset, are available before the court. Under the above circumstances, I hold that the properties obtained by the five sisters under the Partition Deed No.499/03 continued to be held as co-ownership properties even after execution of the RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 9 :- Partnership Deed dated 28.01.03. 13. Having held the properties to be coownership properties, the suits OS 497/06 and OS 181/07 for partition of the properties are liable to be decreed. The judgment and decree of the trial court are only to be upheld and I do so. 14. Coming to OS 238/12, it is filed by Zeenath against her sisters. The assignee under Ext.A1, which is sought to be set aside in OS 293/12 is the additional fifth defendant therein, the relief claimed reads thus:- “(a) Restraining the defendants and their men from causing any obstructions to the plaintiff from entering into the plaint schedule property, from managing the partnership business in respect of the plaint schedule property along with the defendants and from committing any mischief.” 15. The relief is claimed in the capacity as partner of the firm, against the other partners. Section 69(1) of the Indian Partnership Act reads thus, RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 10 :- “ **69. Effect of non-registration** . **—** (1) No suit to enforce a right, arising from a contract or conferred by this Act, shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm”. 16. Admittedly the partnership is unregistered. Therefore suit is, as rightly held by the trial court, barred under Section 69(1) of the Indian Partnership Act. The decree of the trial court dismissing the suit warrants no interference. 17. In OS 293/12 from which RFA 247/14 arises, the relief claimed is for setting aside Ext.A1 Sale Deed. The grounds on which the sale deed is sought to be set aside are:- (a) The property being a partnership asset, the interest of a partner in a specific item of RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 11 :- partnership property is inalienable. (Addanki Narayanappa v. Bhaskara Krishnappa (dead) and others AIR 1966 SC 1300 ). (b) The terms of the partnership deed expressly prohibits a partner from alienating his share in the partnership without the consent of the other partners. (c) “Non est factum” - the plaintiff was made to believe that she was executing a security deed for the distributionship of a film; she never intended to execute a Sale Deed. 18. Having found that the property is coownership property and is not a partnership asset, the first contention does not survive. As regards the second ground of challenge, a bare reading of Ext.A1 reveals that what is purported to be conveyed thereunder is 1/5[th] right of the plaintiff RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 12 :- as a co-owner over the property. It is not an assignment of the rights of the partner under the partnership deed. Therefore, the said ground of challenge also fails. 19. Now the question for determination is regarding the plea of “non est factum”. Law is settled that the burden is heavy on the person who raises the plea, especially when he is not an illiterate. 20. According to the plaintiff, she was having good relationship with her sisters and reposed absolute confidence in them and their husbands. On 15.03.2003, the husband of the plaintiff was out of station. Sri.Anzari Labba and Sri.D.J.Faizal, the husbands of the plaintiff's two sisters informed her that a security bond is to be executed and registered in favour of a film distributor for RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 13 :- getting new films and in view of the urgency pointed out by them, the document was executed. Later it was realised that the document so got executed was a sale deed. 21. On the evidence available, certain circumstances lean in favour of the plaintiff. According to the defendants, the husband of the plaintiff was acting as the Manager of the firm. On the day on which Ext.A1 sale deed was executed, admittedly he was out of station. The extreme urgency for execution of Ext.A1 on that day, in his absence, has not been brought out. Ext.A1 sale deed is stated to have been executed pursuant to an agreement for sale dated 23.11.05. The agreement for sale is claimed to have been executed by all the five sisters together in favour of the first defendant - Sirajudeen. The execution of the RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 14 :- agreement for sale is disputed by the plaintiff. Though the alleged agreement for sale relates to the interests of all the sisters, Ext.A1 sale relates to the rights of the plaintiff alone. This is under normal circumstances improbable. The defendants set up a case that the proposed purchaser Sirajudheen sought for time for completing the sale and that the husband of the plaintiff was not agreeable and it was under such circumstances that Ext.A1, regarding the plaintiff's share alone, was executed. There is nothing to indicate that the plaintiff or her husband were in urgent need of money. After having entered into an agreement for sale in respect of a property, under ordinary circumstances a prudent purchaser would not purchase a mere[1] /5 shares out of the property especially when the subject matter RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 15 :- is a theatre. Further, though Ext.A1 sale deed recites the sale consideration as `6 lakhs, according to the defendants, the total consideration paid for Ext.A1 was `50 lakhs. There is absolutely no evidence to prove the passing of consideration. According to the plaintiff, no consideration has passed since no sale deed was under contemplation. Relying on the decision of this Court in Pathu v. Katheesa Umma, [1990(2) KLT SN.51] , it is argued by the respondents that since the document is a registered one, its due execution is to be presumed. However, as held in Ponnan v. Kuttipennu [1987 (2) KLT 455] , when the execution is denied, registration does not amount to proof of execution. 22. As against the above circumstances, there are various circumstances, as pointed out by the RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 16 :- defendant, which favour the genuiness of the sale. In addition to Ext.A1 sale deed, Ext.B17 sale note was executed regarding the furniture and other equipments in the theatre. This probabilises the execution of Ext.A1 sale. According to the plaintiff, the execution and registration of Ext.A1 did not take place at the Sub Registrar's Office; she was made to affix signatures while she was at the ground floor of the building. However, the Sub Registrar or the Document writer have not been examined. The document writer is the same person who executed sale deed in respect of the other two items(items 1 and 4) that belonged to the sisters under the partition. Though in paragraph 3 of the plaint, it is alleged that the brother of the plaintiff's husband accompanied the plaintiff to the SRO, he has not been examined. The plaintiff RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 17 :- who is said to have been defrauded has not stepped into the witness box. Though under Section 120 of the Indian Evidence Act, the husband may be a competent witness to depose on behalf of wife, in the nature of the allegations as made, the plaintiff was a vital witness and her nonexamination looms large. 23. From the above, I notice that evidence necessary for a proper determination of the suit has not been brought on record. The evidence on record is insufficient to arrive at a proper finding in favour of or against Ext.A1 Sale Deed. Material witnesses have not been examined. No evidence has been brought in with regard to passing of consideration. In the circumstances I am of the opinion that it would only be appropriate if the parties are given an opportunity to adduce further RFA Nos.96 of 2012, 827 of 2010, 238 & 247 of 2014 :- 18 :- evidence and the matter be considered afresh. The decree and judgment in OS 293/12 is to be set aside and the suit remanded back to the trial court for disposal de novo. In the result, RFA Nos.96/12, 827/10, 238/14 are dismissed, but without costs. RFA 247/14 is allowed. The judgment and decree in OS 293/12 is set aside and the suit is remitted back to the trial court for disposal de novo after affording opportunity to all the parties to adduce further evidence. Parties to appear before the trial court on 24.07.2019. **Sd/SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## RFA NO.827/2010 The Judgment dated 28.06.2019 in RFA Nos.96/12, 827/2010, 238/2014 and 247/2014 is reviewed as per order dated 19.8.19 in RP 703/19 in RFA 827/2010 and it is directed that RFA No.827/2010 will stand allowed and a preliminary decree for partition is passed, allotting 4/5[th] shares to the plaintiffs in the plaint schedule property therein. It is clarified that in all other respects the judgment dated 28.06.2019 shall remain intact. Sd/- **Deputy Registrar**