Delhi District Court
Vijay Pratap Etc vs Vikram Taneja on 20 December, 2024
VIJAY PRATAP ETC VS. VIKRAM TANEJA
DLST010003442010
IN THE COURT OF DISTRICT JUDGE-02, SOUTH,
SAKET COURTS COMPLEX, NEW DELHI
Presiding Judge: Dr. Yadvender Singh
CS DJ No. 6779/2016
Filing No. 27135/2016
CNR No. DLST01-000344-2010
In the matter of:
1. Vijay Pratap
S/o Late Shri D.B. Lall
R/o C-406, Defence Colony,
New Delhi-110024.
2. Shakuntala Rani Taneja
W/o Late Shri D.B. Lall
R/o C-406, Defence Colony,
New Delhi-110024.
................Plaintiffs
Versus
Vikram Taneja
S/o Late Shri D.B. Lall Digitally signed by
YADVENDER YADVENDER
SINGH
SINGH Date: 2024.12.20
19:43:30 +0530
CS DJ No. 6779/2016
Page 1 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024
VIJAY PRATAP ETC VS. VIKRAM TANEJA
R/o B-204, Kenwood Tower,
Charmwood Village, Faridabad,
Haryana 121009
.............Defendant
Date of Institution : 13.08.2010
Date of reserving the judgment : 29.11.2024
Date of pronouncement : 20.12.2024
Decision : Dismissed
SUIT FOR DISSOLUTION OF PARTNERSHIP FIRM,
RENDITION OF ACCOUNTS AND FOR RECOVERY OF
RS.3,52,000/- (RUPEES THREE LACS FIFTY TWO
THOUSAND ONLY) ALONGWITH PENDENTELITE AND
FUTURE INTEREST
JUDGMENT
1. Vide this judgment, I shall decide the Civil Suit filed by the plaintiff for dissolution of partnership firm, rendition of accounts and for recovery of Rs. 3,52,000/- alongwith pendentelite and furture interest. The brief facts of the case, as per the plaint, are as under:-
1.1. The plaintiffs no.1 and 2 are son and mother respectively and the defendant is the real brother of plaintiff No.1.
Plaintiffs no.1 and 2 and defendant happen to be partners of the firm in the name of M/s De Laul's which was carrying on business Digitally signed by YADVENDER YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:43:34 +0530 Page 2 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA of Tailors and Drapers. The firm came into existence by virtue of a Partnership Deed dated 16.06.1985, which was subsequently registered with the Registrar of Firms vide Registration No. 302/88 dated 11.02.1988. Plaintiff no.2 was a sleeping partner and the entire functioning of the partnership firm was managed by the plaintiff no.1 and defendant as partners of the Firm and the plaintiff and defendant were at the helm of affairs of the partnership firm by the name of M/s De Laul's.
1.2. On 16.08.2004, a firm by the name of M/s Krezy Apparels filed a Civil Suit for recovery in the sum of Rs.5,19,565.26/- against the partnership firm M/s De Laul's. In the said suit bearing CS No. 652/08 titled M/s. Krezy Apparels Vs. M/s. De Laul and others, it was alleged that the plaintiff therein/M/s Krezy Apparels, which was carrying on its business of manufacturing, selling and marketing of readymade garments/ wearing apparels had supplied readymade garments to the defendant therein/M/s De Lauls as per the terms and settlement agreed between them. It was specifically alleged that M/s Krezy Apparels had supplied goods worth Rs.7,13,009/- to M/s De Laul after having received orders in this regard. It was also alleged that M/s Krezy Apparels had provided three temporary loans of Rs.40,000/- each (total amounting to Rs.1,20,000/-) on various Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:43:40 +0530 Page 3 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA dates. It was also averred by the plaintiff therein/ M/s Krezy Apparels that the defendant therein/M/s De Laul's had paid a total sum of Rs.3,00,774.11 paise from time to time by way of various cheques w.e.f. 20.07.1999 to 16.08.2001. It was contended on behalf of M/s Krezy Apparels that Special Order Discounts were also availed by M/s De Laul and after adjusting the said payment and discount, a total sum of Rs.5,19,565.26 including the temporary loan of Rs.1,20,000/-, was due and payable by the defendant therein/M/s De Laul. The defendant therein/M/s De Laul controverting and refuting the bald allegations leveled against them. On completion of pleadings, issues were framed and evidence was led on behalf of the respective parties and thereafter judgment and decree dated 22.12.2008 was passed thereby directing M/s De Laul's to pay a sum of Rs.4,87,041.18 paise along with interest @ 24% p.a. w.e.f. 30.04.2002 till its realization. Thereafter, the partnership firm M/s De Laul's being aggrieved by the said judgment and decree dated 22.12.2008, impugned the same by way of a Regular First Appeal before the Hon'ble High Court of Delhi vide R.F.A. No. 124 of 2009 titled "M/s. De Laul's and others Vs. M/s. Krezy Apparels".
1.3. During the pendency of the abovesaid appeal, the matter was referred to the Delhi High Court Mediation and Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:43:46 +0530 Page 4 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA Conciliation Centre with the consent of both the parties. In order to reach amicable settlement between the parties, various meetings were held on 08.04.2009, 13.04.2009, 16.04.2009, 17.04.2009, 22.04.2009, 28.04.2009 and 30.04.2009 respectively. After having gone through marathon discussions, a settlement agreement dated 30.04.2009 was arrived at between them and the appellant therein/M/s De Laul's agreed to pay a sum of Rs. 5,50,000/- to the respondent therein in full and final settlement. Subsequently, a cheque in the sum of Rs. 5,50,000/- was handed over by Sh. Vijay Pratap, from his own personal funds which was duly encashed. Thereafter, a statement was made on behalf of the respondent therein M/s Krezy Apparels that after having received the sum of Rs. 5.50 lacs, nothing remains due and in the light of the said statement, the Appeal bearing RFA No. 124 of 2009 was disposed off as settled vide Order dated 13.07.2009 passed by the Hon'ble High Court of Delhi.
1.4. The defendant/Sh. Vikram Taneja participated in the entire negotiation process but subsequently resiled from his stand and with a view to cause wrongful loss to the plaintiff herein, refused to sign the Settlement Agreement dated 30.04.2009. Being a partner of the firm M/s De Laul, he was equally liable for the debts incurred by the Partnership Firm during the conduct of the Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:43:51 +0530 Page 5 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA Partnership business. The plaintiff herein was shell shocked and flabbergasted by the conduct of the defendant herein who took a U-turn and refused to contribute any amount towards the aforesaid settlement at the eleventh hour and in these excruciating circumstances, the plaintiff herein had no other option but to pay the entire amount of Rs.5,50,000/- from his own personal account so that precious time which has been consumed in arriving at the negotiated settlement could not be rendered futile. The reluctance on the part of the defendant herein to contribute any amount towards the aforesaid settlement was malafide and mischievous. With a view to achieve his illegal designs to evade his liability, the defendant herein went one step ahead and filed an application bearing C.M. No. 6439/2009 thereby praying for setting aside the Settlement Agreement dated 30.04.2009 allegedly on the ground that the said agreement had been unilaterally entered into by the plaintiff herein without seeking his consent for the aforesaid purpose. It was also alleged on behalf of the defendant therein that he was not a 50% partner in the firm by the name of M/s De Laul's. The said application bearing C.M. No. 6439 of 2009 was disposed of alongwith R.F.A. No. 124/2009 by the Hon'ble High Court of Delhi which observed that in case, the defendant did not pay 50% amount of the Settlement Agreement, the plaintiff will YADVENDER Digitally signed by YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:43:59 +0530 Page 6 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA have the right to recover the same by initiating appropriate proceedings. The settlement agreement dated 30.04.2009 was entered into on behalf of the firm namely M/s De Laul, with the prior approval and consultation of the defendant herein and the same is corroborated by the fact that the defendant had also participated in the entire negotiation process and he has even given his consent in writing at the time of reference of disputes to the Mediation Cell. In view of the fact that the defendant was a partner in the said firm and was at the helm of affairs of the business carried on by the firm, he cannot escape his liability to the tune of Rs.2,75,000/-, being 50% of the settlement amount by taking subterfuge on the pretext that he had not signed the Settlement Agreement dated 30.04.2009 or that the said Agreement is not binding upon him. Since the plaintiff No.1 and the defendant herein were the only two partners in the said suit No. 652/08 titled M/s Krezy Apparels Vs. M/s De Lauls before the Court of Ld. Additional District Judge, the Decree passed by that Court would be binding against the said two partners in equal ratio i.e. the plaintiff no.1 and defendant herein were liable to pay the Decreetal amount equally. Withholding the payment of Rs.2,75,000/- by the defendant herein without any legitimate cause had resulted in wrongful loss to the plaintiff herein who had taken the pains to pay Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:44:05 +0530 Page 7 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA the entire amount of Rs.5,50,000/-, from his own account after taking prior approval and consent of the defendant. Furthermore, the defendant ought to have continued with his appeal in case he thought that the settlement amount was unreasonable or harsh. It is submitted that the defendant acquiesced to the disposal of the appeal thereby acknowledging his liability. The plaintiff requested the defendant to pay his 50% share but the defendant has refused to refund the same. Therefore, it has become crystal clear that the defendant has no intention to pay the legitimate dues of Rs.2,75,000/- and as such, he is also liable to pay interest @ 24% р.а. w.e.f. 30.04.2009 to 30.06.2010 whereby totaling a sum of Rs.3,52,000/-. The defendant is also under an obligation to pay the pendente lite and future interest on the said amount.
1.5. The partnership firm by the name of M/s De Laul's continued its business till the year 2002 and thereafter no business has been carried out by the said firm. However, the balance sheet pertaining to the firm M/s De Laul's was filed till the year 2005. It is pertinent to mention here that the entire books of accounts were managed by the defendant Sh. Vikram Taneja who has siphoned off the entire funds of the partnership firm by manipulating and forging the books of account thereby causing phenomenal loss to the plaintiff herein. The dishonest acts and omissions on the part of YADVENDER Digitally signed by YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:44:11 +0530 Page 8 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA the defendant has resulted in loss of business thereby bringing the Partnership firm on the brink of closure. The defendant/Sh. Vikram Taneja has not rendered the accounts of the Partnership firm till date, despite requests made in this regard by the plaintiff. Thus, the defendant is liable to be directed to render the accounts of the partnership firm by the name of M/s De Laul's. The partnership firm by the name of M/s De Laul's had not been carrying on business since the year 2002, the plaintiff also seeks the dissolution of the said firm namely M/s De Laul's. Hence, the present suit has been filed by the plaintiff with the following prayer.
"A. To pass a Decree for recovery in the sum of Rupees 3,52,000/- (Rupees Three Lakhs Fifty Two Thousand Only) along with pendente lite and future interest @ 24% per annum from the date of the filing of the present suit till its actual realization, against the Defendant along with full costs of the suit, in the light of the facts and circumstances narrated hereinabove.
B. To pass a Decree thereby directing the Defendant to render the accounts of the partnership firm by the name of M/s De Laul's.
C. To pass a Decree of Dissolution of the partnership firm by the name of M/s De Laul's.
D. Any other order(s) which this Hon'ble Court deem fit and proper in the facts and circumstances of the case may also be granted in favour of the Plaintiff Digitally signed by YADVENDER YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:44:18 +0530 Page 9 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA and against the Defendant."
2. The summons were issued to the defendant vide order dated 18.08.2010. During the proceedings, application under Order V Rule 20 was moved by the plaintiff for service of defendant by substituted mode. Defendant was served through publication in newspaper 'Dainik Jagran' New Delhi Edition dated 19.03.2012. Despite service, defendant failed to appear and hence, he was proceeded ex-parte vide order dated 22.03.2012. Thereafter, an application on behalf of the defendant under Order IX Rule 7 CPC for setting aside ex-parte order was filed, which was allowed vide order dated 05.11.2012 and order dated 22.03.2023 was set aside. Defendant was directed to file written statement. Defendant contested the suit by filing the written statement.
3. In the written statement, the defendant submitted that the present suit is not maintainable and plaintiff cannot be permitted to force the defendant to pay the said amount. The plaintiff no.1 had settled the alleged claim of M/S Krezy Apparels without any consent and approval of the defendant and after settling the same by the plaintiff himself, the plaintiff now can not be permitted to file the present suit. The present suit is liable to be dismissed being devoid of any merit. The present suit is also bad for non-joinder of Digitally signed by YADVENDER YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:44:25 +0530 Page 10 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA necessary parties i.e. M/s Krezy Apparels. It is submitted that the plaintiff no.2 Smt. Shakuntala Rani Taneja, who was also one of the partner of the firm M/s De Laul's, has unfortunately expired but after her death, the plaintiff no.1 has not taken any necessary step in this regard. It is further submitted that the plaintiff cannot be permitted to claim 50% share of the alleged amount allegedly given to said M/S Krezy Apparels by the plaintiff no.1 herein as alleged in the present suit. The plaintiff no.1 was the partner of 1/3rd share of the said firm i.e. M/s De Laul's, therefore, the plaintiff no.1 has now got no right alone to claim share of the plaintiff no.2/mother who has since expired in respect of said partnership firm M/S De Laul's to the exclusion of other legal heirs of Late Smt. Shakuntala Rani Taneja/plaintiff no.2. It is also submitted that other legal heirs of the plaintiff no.2, have not yet been impleaded in the present suit after the death of the plaintiff no. 2/Smt. Shakuntala Rani Taneja who was the mother of the plaintiff no.1. The present suit is not maintainable as the same is barred by time. The suit is not maintainable as the plaintiffs have not approached the court with clean hands and has concealed the material true facts. In the written statement, defendant denied all the allegations of the plaintiff against him.
4. The plaintiff filed replication to the written statement of YADVENDER Digitally signed by YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:44:43 +0530 Page 11 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA the defendant wherein he has denied the averments made by the defendant and reiterated the facts stated in the plaint.
5. On the basis of the pleadings, following issues were framed on 11.04.2013:-
1. Whether plaintiff is entitled for a decree of recovery of Rs.3,52,000/- alongwith pendent elite and future interest at a rate of 24% per annum as claimed in the plaint? OPP
2. Whether the plaintiff is entitled for a decree of dissolution of partnership firm under the name and style of M/s De Laul's? OPP
3. Whether suit is not maintainable in the present form on account of unilateral settlement of dispute? OPD
4. Whether Smt Shakuntla Rani Taneja another Parter of the firm M/S De Laul's has been expired if so, to what effect? OPD
5. Whether suit is barred by limitation? OPD
6. Whether suit is not valued for the purpose of Court Fee? OPD
7. Relief.
6. The matter was fixed for plaintiff's evidence. The plaintiff examined himself as PW1. He tendered his evidence by way of Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:44:50 +0530 Page 12 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA affidavit Ex.PW1/A. He has relied upon following documents:
1. Partnership-Deed dated 16.06.1985 as Ex.PW1/1.
2. Registration Certificate (Form 'A') issued in favour of M/s De Laul's as Ex.PW1/2.
3. Copies of judgment and decree dated 22.12.2008 as Mark-A.
4. Certified copy of Regular First Appeal bearing RFA No. 124/09 as Ex. PW1/4.
5. Certified copy of settlement agreement dated 30.04.2009 as Ex. PW1/5.
6. Certified copy of order dated 13.07.2009 passed by the Hon'ble High Court of Delhi as Ex. PW1/6.
7. Copy of cheque dated 30.04.2009 as Mark 'B'.
8. Certified copy of application bearing C.M. No. 6439/2009 as Ex. PW1/8.
9. Copy of profit and loss account for the year ended 31.03.2006 as Mark 'C'.
10. Copy of Balance-sheet as on 31.03.2006 as Mark 'D'.
6.1. Plaintiff/PW1 was duly cross-examined at length by Ld. counsel for the defendant.
7. Plaintiff also examined Sh. Sanjeet Kumar, Judicial Assistant, Record Room Sessions, Tis Hazari Courts, Delhi as PW-2. He brought the summoned record i.e. order dated Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:44:56 +0530 Page 13 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA 22.12.2008 in suit bearing No. 652/2008, titled as M/s Krezy Apparals Vs M/s DE Laul & Ors. The copy of the order was exhibited as Ex.PW2/1(OSR). He was also cross-examined by Ld. counsel for the defendant wherein he deposed he had seen the judicial file and there is no order in the judicial file in respect of the order passed in RFA no.124/2009 which was filed against the judgment and decree dated 22.12.2008.
8. Plaintiff also examined Sh. Rajesh Kumar, Judicial Assistant, RKD Branch, Hon'ble Delhi High Court as PW-3. He brought the summoned record i.e. the RFA No.124/2009 titled as M/s De Laul Vs M/s Krezy Apparels, which was exhibited as Ex.PW3/1 (OSR). During his examination-in-chief, photocopy of settlement agreement dated 30.4.2009 was also exhibited as Ex.PW3/2 (OSR), interim application bearing I.A no.6439/2009 in RFA no.124/2009 was also exhibited as Ex.PW3/3 (OSR) and copy of order dated 13.7.2009 passed in RFA no.124/2009 was exhibited as Ex.PW3/4 (OSR). He has also brought the certificate U/s 65B of the Evidence Act, 1872 as the original file pertaining to RFA 124/2009 has been destroyed and it has been kept in a digitized record, which was exhibited as Ex.PW3/5. He was also cross-examined by Ld. counsel for the defendant.
9. Plaintiff also examined Sh. Kuldeep Singh Wahi, Assistant Digitally signed by YADVENDER YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:45:03 +0530 Page 14 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA Manager from HDFC Bank, Defence Branch, New Delhi as PW-4.
He brought the statement of account of Sh. Vijay Pratap bearing account no. 01341000069565 which reflects the cheque bearing no. 0270698 has been honoured in favour of Krezy Apparel. The bank statement was exhibited as Ex. PW4/1. He was also cross- examined by Ld. counsel for the defendant.
10. Plaintiff also examined Sh. Amit Kumar, DEO (Data Entry Operator) from the Office of the District Magistrate, Jam Nagar Office, New Delhi-110011 as PW-5. He brought the summoned record ie. the registration certificate issued to M/s De Lauls vide registration No.302 of 1988, copy of which was exhibited as Ex.PW5/A (OSR). Copy of Form-B which is the acknowledgement of registration of Firm was also exhibited as Ex.PW5/B (OSR) in his examination-in-chief. He was also cross- examined by Ld. counsel for the defendant.
11. No other witness was examined by the plaintiff. Thereafter plaintiff's evidence was closed on 04.06.2018.
12. In defendant's evidence, the defendant examined himself as DW1. He tendered his evidence by way of affidavit Ex.DW1/A. He has relied upon following documents:
1. Copy of settlement dated 30.04.2009 already exhibited as Ex.PW1/5. Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 19:45:10 +0530 CS DJ No. 6779/2016 Page 15 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA
2. Copy of the partnership deed dated 16.06.1985 already exhibited as Ex.PW1/1.
3. Copy of the order dated 13.07.2009 already exhibited as Ex.PW1/6.
4. Certified copy of application bearing C.M. No. 6439/2009 already exhibited as Ex.PW1/8.
13. DW-1 was cross-examined at length by Ld. counsel for the plaintiff.
14. No other witness was examined by the defendant. Thereafter defendant's evidence was closed on 09.01.2023.
15. Vide order dated 29.11.2024, upon inquiry, Ld. counsel for both the parties submitted that there was no dispute regarding the fact that the partnership firm had already been dissolved. They submitted that plaintiff no.2, who was also one of the partner, had already been expired and on death of the plaintiff no.2 being third partner there remained no dispute regarding dissolution of the partnership firm. They submitted that they had no objection if the issue no.2 as framed on 11.04.2013 was deleted. Therefore, in view of the aforesaid submission and considering that there was no dispute remained left regarding dissolution of the partnership firm, issue no.2 was deleted in exercise of power under Order 14 Rule 5 CPC. Ld. counsels for the parties submitted that they had also no Digitally signed by YADVENDER YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:45:19 +0530 Page 16 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA objection if the issues No.3 to 6 as framed on 11.04.2013 were deleted. By exercising the power under Order 14 Rule 5 CPC, issues no.3 to 6 were also deleted. Accordingly, issues no.2 to 6 as framed on 11.04.2013 were deleted vide order dated 29.11.2024.
16. I have heard the submissions of Ld. counsel for the plaintiff and perused the material on record. Written arguments were also filed on behalf of plaintiff and defendant. My issues wise findings are as under:-
Issue No.1: Whether plaintiff is entitled for a decree of recovery of Rs.3,52,000/- alongwith pendent elite and future interest at a rate of 24% per annum as claimed in the plaint? OPP
17. Plaintiff no.1 and plaintiff no.2 narrative is that they were son and mother respectively, whereas the defendant happens to be the real brother of plaintiff no.1 and son of the plaintiff no.2. All of them were partners of a firm by the name of M/s De Laul's. The firm came into existence by virtue of a partnership deed dated 16.06.1985 and was registered with the Registrar of Firms vide Registration No. 302/88 dated 11.02.1988. Plaintiff no.2 Smt. Shakuntala Rani Taneja was a sleeping partner and the entire functioning of the partnership firm was managed by the plaintiff no.1 and defendant as partners of the firm. On 16.08.2004, a firm by the name of M/s Krezy Apparels filed a Civil Suit for recovery Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:45:26 +0530 Page 17 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA of Rs.5,19,565.26/- against the petitioners partnership firm and a judgment and decree dated 22.12.2008 was passed against the plaintiffs' firm to the sum of Rs.4,87,041.18/- alongwith interest @ 24% p.a. w.e.f. 30.04.2002 till its realization. Thereafter, plaintiffs' partnership firm being aggrieved by the said judgment and decree dated 22.12.2008, impugned the same by way of a Regular First Appeal before the Hon'ble High Court of Delhi. During the pendency of the appeal, the matter was referred to the Delhi High Court Mediation and Conciliation Centre with the consent of both the parties. The settlement agreement dated 30.04.2009 was arrived at between them, by virtue of which, the appellant therein/plaintiff No.1 herein agreed to pay Rs. 5,50,000/- to the respondent therein in full and final settlement. Subsequently, a cheque in the sum of Rs. 5,50,000/- was handed over by Sh. Vijay Pratap/plaintiff no.1, from his own personal funds which was duly encashed. Thereafter, a statement was made on behalf of the respondent therein that nothing remained due and RFA was disposed of as settled vide order dated 13.07.2009 passed by the Hon'ble High Court of Delhi. Sh. Vikram Taneja/defendant herein participated in the entire negotiation process but subsequently resiled from his stand and refused to sign the settlement agreement dated 30.04.2009. The settlement agreement dated 30.04.2009 was Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:45:44 +0530 Page 18 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA entered into on behalf of M/s De Laul's with the prior approval and consultation of the defendant herein. Moreover, in view of the fact that defendant herein was partner in the said firm and was at the helm of affairs of the partnership firm, he cannot escape his liability to the tune of Rs.2,75,000/- being 50% of the settlement amount. The plaintiff no.1 herein and the defendant herein were the only two defendants in the abovesaid civil suit before the Ld. ADJ Court and decree was passed by that court would be binding against said two partners in equal ratio. The partnership firm M/s De Laul's has not been carrying its business since the year 2002.
18. Written statement was filed on behalf of the defendant on 07.12.2012. The defendant denied his liability for the claim amount. It was contended that the settlement dated 30.04.2009 had taken place only with the sole consent of the plaintiff herein in collusion with said M/s Krezy Apparels itself and in fact if the plaintiff no.1 herein had agreed himself alone without taking any prior permission and approval of the answering defendant herein to make the alleged payment then the plaintiff would not be entitled to recover amount from the answering defendant as the answering defendant never agreed to the said settlement arrived in between plaintiff no.1 herein and said M/s Krezy Apparels. The defendant herein had filed application bearing C.M. No. 6439/2009 before Digitally signed by YADVENDER YADVENDER SINGH SINGH CS DJ No. 6779/2016 Date: 2024.12.20 19:45:50 +0530 Page 19 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA the Hon'ble High Court of Delhi by pointing out that the said unilateral act on part of the plaintiff no.1 herein was not acceptable to the answering defendant. However, the Hon'ble High Court of Delhi was pleased to dispose of the said application vide order dated 13.07.2009 without prejudice to the aforesaid submission.
19. Replication was filed by the plaintiff wherein plaintiff no.1 denied the averments made by the defendant and reiterated the facts stated in the plaint.
20. Admittedly plaintiff no.2 expired on 09.02.2011 leaving behind four Class I Legal Heirs i.e. Sh. Vijay Pratap/plaintiff no.1 herein, Sh. Vikram Taneja/defendant herein and two daughters namely Smt. Vijay Laxmi Marwa and Dr. Asha Chugh. However, admittedly no application was filed to bring the legal heirs of plaintiff no.2 on her death.
21. Order XXII CPC provides that where there are more plaintiffs or defendants than one, and any of them dies, and where the right to sue survives to the surviving plaintiff or plaintiffs alone, or against the surviving defendant or defendants alone, the Court shall cause an entry to the effect to be made on the record, and the suit shall proceed at the instance of the surviving plaintiff or plaintiffs, or against the surviving defendant or defendants. Ld. Predecessor Judge chose to proceed with the suit despite no Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:45:57 +0530 Page 20 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA substitution application was filed by plaintiff No.1 on the death of plaintiff No.1.
22. The plaintiff no.1 examined total five witnesses to prove its case. He examined himself as PW1. PW2 to PW5 were the summoned witnesses alongwith the record.
23. PW1 tendered his affidavit of evidence as Ex.PW1/A. He relied upon documents Ex.PW1/1, Ex.PW1/2, Ex.PW1/4, Ex.PW1/5, Ex.PW1/6, Ex.PW1/8 and Mark-A to Mark-D. He repeated that contents of the plaint in his affidavit of evidence Ex.PW1/A. Ex.PW1/1 is Partnership-Deed dated 16.06.1985. Ex.PW1/2 is Registration Certificate (Form 'A') issued in favour of M/s De Laul's. Ex.PW1/4 is certified copy of Regular First Appeal bearing RFA No. 124/09. Ex. PW1/5 is certified copy of settlement agreement dated 30.04.2009. Ex.PW1/6 is certified copy of order dated 13.07.2009 passed by the Hon'ble High Court of Delhi. Ex.PW1/8 is certified copy of application bearing C.M. No. 6439/2009. Mark-A are the copies of judgment and decree dated 22.12.2008 passed by the Ld. ADJ, Delhi in suit bearing No. 652/08 titled M/s Krezy Apparels Vs. De Laul's & Anr. Mark-B is copy of cheque dated 30.04.2009. Mark-C is copy of profit and loss account for the year ended 31.03.2006 and Mark-D is copy of Balance-sheet as on 31.03.2006. These documents were not Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:46:03 +0530 Page 21 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA objected by the defendant. During his cross-examination dated 22.01.2016, PW1 answered that the name of his partnership firm was M/s De Laul's and there were three partners namely Smt. Shakuntala Rani (Sleeping partner), Sh. Vijay Pratap/plaintiff No.1 and Sh. Vikram Taneja/defendant and each partner was having 1/3rd share in the said business of partnership firm. He admitted that Smt. Shakuntala Rani was having 1/3rd share. He answered that it was correct that it had not been mentioned in the partnership deed that Smt. Shakuntala Rani was a sleeping partner. He also admitted that M/s De Laul's partnership firm has not been arrayed as a party in the present suit. He voluntarily answered that because in sale tax there is a clause that after three years if returns had not been filed on behalf of the partnership firm then the partnership firm is deemed to be dissolved and as per the income tax law, if the returns on behalf of the firm had not been filed within six years then the partnership firm is deemed to be dissolved and for reason, the partnership firm was not impleaded as a party in the present suit. He answered that he stopped filing the sales tax returns more than eight years prior to the filing of the present suit in the year 2010. He also admitted that firm De Laul's has been dissolved much prior to the filing of the present suit. He also admitted that before making payment to M/s Krezy Apparels a sum of Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 19:46:12 CS DJ No. 6779/2016 +0530 Page 22 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA Rs.5,50,000/-, defendant herein had not given him any writing that he would pay 50% of the said amount to him. He voluntarily answered that defendant had continuously submitted in the mediation for payment of 50% of Rs.6 lacs for the purpose of settlement and thereafter, the matter was settled for Rs.5,50,000/- in the mediation. He also admitted that the settlement agreement Ex.PW1/5 did not bear the signature of defendant herein. He answered that he had not taken any written permission from defendant before giving Rs.5,50,000/- to the M/s Crazy Apparel. However, he voluntarily answered that he had sought oral consent from defendant herein before making the payment. He answered that he and defendant was jointly laiable to pay the decreetal amount to M/s Crazy Apparel. He answered that whenever partnership firm M/s De Laul's took any loan from any person the defendant herein used to sign the said loan document. He answered that the partnership firm M/s De Laul's had not taken any loan from M/s Krezy Apparels to the tune of Rs.1,20,000/-. He answered that no action was taken for recovery of amount of Rs.1,20,000/- from M/s Krezy Apparels. He answered that the amount of Rs.1,20,000/- was deducted by M/s Krezy Apparels by way of loan from M/s De Laul. He admitted that aforesaid claim of Rs.1,20,000/- was the part of the settlement arrived at between him Digitally signed by YADVENDER YADVENDER SINGH SINGH CS DJ No. 6779/2016 Date: 2024.12.20 19:46:18 +0530 Page 23 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA acting on behalf of M/s De Laul and M/s Krezy Apparels. He answered that before drafting the settlement agreement, it had been mutually agreed between him and defendant herein that if the matter is settled for Rs.6 lakhs or under, he shall pay half of the said amount to hi. On the question that in his affidavit he had stated that defendant herein gave his consent for the matter to be referred in mediation in the proceedings before the Hon'ble High Court, whether the said consent was given by Mr. Vikram Taneja in writing, PW1/plaintiff answered that he did not remember. He also answered that he did not remember the date when defendant had backed out from his undertaking to share half of the settlement amount. He admitted that firm and other partners cannot be bound by the unilateral act of one of the partners.
24. Remaining witnesses PW2 to PW5 are formal in nature and they are summoned witnesses alongwith record and the summoned record was not disputed in terms of its genuineness. Accordingly, only PW1 remained star witness in PE.
25. Plaintiff No.1 did not led any evidence to show that his mother/plaintiff No.2 was a sleeping partner in the firm and her status as a partner in the firm was not at par with other partners. Analysis of evidences led by plaintiff No.1 and his answers in the cross-examination shows that status of plaintiff no.2 as a partner in Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:46:25 +0530 Page 24 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA the partnership firm, is indistinguishable from the other partners. Accordingly, plaintiff no.1 shall not be entitled for half of the alleged settlement amount at any cost. At most, he may claim 1/3 rd share of the settlement amount being one of the three partners of the firm. However, the validity of this claim shall also be checked further.
26. Present suit has been filed against the defendant for his liability towards co-partners. Plaintiff No.1 claims that the complete settlement amount was given to the third party by him to compromise the matter against the firm and accordingly defendant being one of the partner must be liable to pay half of the amount to him.
27. Section 19 of The Indian Partnership Act, 1932 provides the implied authority of partner as agent of the firm. Section 19 is subject to the provisions of Section 22. Section 22 of the Act, 1932 provides that in order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm. Section 19 of the Act provides that subject to the provision of Section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. The authority of a Digitally signed by YADVENDER YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:46:32 +0530 Page 25 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA partner to bind the firm conferred by this section is called his 'implied authority'. Section 19 (2) of the Act provides that in the absence of any usage or custom of trade to the contrary the implied authority of a partner does not empower him to compromise or relinquish any claim or any portion of claim of the firm, withdraw a suit or proceedings filed on behalf of the firm as well as admit any liability in a suit or proceeding against the firm.
28. In case titled Chainraj Ramchand, Registered Partnership Firm of Bankers, by Partner Ramchand Lekhraj Vs. V.S. Narayanaswamy, AIR 1982 Mad 326, it was held that 'A partner cannot compromise any claim by the firm unless there is express authority given by all the parties."
29. Section 19(2) of the Indian Partnership Act, 1932 makes it clear that unless there is an express authority given to the partner by all the partners that partner cannot compromise or withdraw the suit.
30. Para 6 of of the judgment in Chainraj Ramchand, Registered Partnership Firm of Bankers, by Partner Ramchand Lekhraj (supra) is reproduced as under:
"Section 19(2) of the Partnership Act 1932 clearly lays down that in the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to compromise or relinquish any Digitally signed by YADVENDER YADVENDER SINGH SINGH CS DJ No. 6779/2016 Date: 2024.12.20 19:46:39 +0530 Page 26 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA claim or portion of a claim by the firm or to withdraw the suit or proceeding filed on behalf of the firm, This section makes it clear that unless there is an express authority given to a partner by all the partners, that partner cannot compromise the claim or withdraw a suit. The trial court has assumed a power on the part of PW 2 to compromise merely because he was attending to the suit filed by the plaintiff firm. To file a suit and to conduct the same on behalf of the firm no express authority is necessary. Therefore, the trial court is in error in assuming an authority express or implied on the part of PW 2 to compromise the matter, merely because he had been conducting the suit on behalf of the plaintiff, or had been claiming the suit amount from the defendants even before the filing of the suit. The trial court has not anywhere said in its judgment that PW2 has an express authority to compromise the suit claim on behalf of the other partners. Though it has said that PW2 entered into a compromise with the consent of all the partners, it has not referred to any materials, which would indicate that there has been any implied or express consent given by the other partners to compromise the suit. In this view of the matter, we are not inclined to accept the view taken by the trial court."
31. As per Section 19(2) of the Act unless an express authority was given to the partner by all other partners or there was any usage or customs or trade to the contrary he cannot alone compromise a claim either in part or whole or withdraw the suit.
32. In Konark Care Vs. Triveni Infrastructure Development Company Ltd., CM Appl. 7430/2010 (for restoration) in FAO (OS) Digitally signed by YADVENDER YADVENDER SINGH CS DJ No. 6779/2016 SINGH Date: 2024.12.20 19:46:46 +0530 Page 27 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA 520/2009 decided on 08.08.2013 by the Hon'ble High Court of Delhi, it is held as under:
"14. The above facts are a matter of record and incontrovertible. On the basis of such application, the appeal was disposed of on 13.04.2010. It is not in dispute - as is evident from Annexure P-1 to the appeal-i.e. the copy of the registration certificate that the appellant is a registered partnership firm. Section 19 (2) of the Partnership Act in no uncertain terms mandates that the implied authority of a partner does not extend to withdrawing or compromising legal proceedings. It clearly states that in the absence of any usage or customs or trade to the contrary, the implied authority of a partner does not empower him to compromise or relinquish any claim or portion of the claim by the firm or to withdraw the suit or proceedings filed on behalf of firm. In other words, unless an expressed authority is given to the partner by all other partners, he cannot alone compromise a claim either in part or whole or withdraw the suit, (refer Chainraj Ramchand v. V.S. Narayanaswamy and Ors., supra).
15. In the present case, there was no attempt made on behalf of Shri Ramesh Kumar Popli to contend that he either had expressed authority or that there was any custom or usage in the trade. Certainly no proof to that effect was offered. These are sufficient for the Court to hold that the order CM-7430/2010 in FAO (OS) 520/2009 Page 11 of 13.04.2010 deserves to be recalled in the interests of justice."Digitally signed
YADVENDER by YADVENDER SINGH SINGH Date: 2024.12.20 19:46:51 +0530 CS DJ No. 6779/2016 Page 28 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA
33. The plaintiff No.1 could not produce any evidence to show any expressed authority of the defendant herein for the abovesaid settlement. He merely argued that the defendant agreed orally to pay half of the settlement amount. However, he also could not prove the alleged oral agreement between him and the defendant for the abovesaid purpose.
34. It is clearly mentioned in Ex.PW1/6 i.e. order dated 13.07.2009 passed by Hon'ble High Court of Delhi in the abovesaid appeal RFA 124/2009 that the question whether in terms of clause (e) of the settlement agreement Sh. Vijay Pratap could take recourse to legal proceedings against Sh. Vikram Taneja, was an issue which this court would not go into and it was outside the scope of the subject matter of the appeal. It has further been clarified in the order itself that if Sh. Vijay Pratap on the strength of clause (e) of the settlement agreement take recourse to legal proceedings against Sh. Vikram Taneja, both of them shall be at liberty to take all pleas as would be available to them in law. So argument of Ld. counsel for plaintiff that defendant is liable to pay half of the settlement amount as he is bound by the terms of settlement agreement Ex.PW1/5 because it was upheld by Hon'ble High Court in appeal Ex.PW1/6 is not factually correct. Hon'ble High Court through order Ex.PW1/6 no where fixed the liability of Digitally signed by YADVENDER YADVENDER SINGH SINGH Date: 2024.12.20 CS DJ No. 6779/2016 19:46:58 +0530 Page 29 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024 VIJAY PRATAP ETC VS. VIKRAM TANEJA the defendant and left it open to be decided in future legal proceedings, if any. It is also admitted position that the settlement dated 30.04.2009 was not signed by the defendant.
35. In view of the abovesaid discussion, settled legal position regarding authority of a partner to compromise any claim by the firm or to withdraw suit or proceeding filed on behalf of the firm and considering that no admission of the defendant for abovesaid settlement or express authority to the plaintiff for the same was proved by the plaintiff, I am of the considered opinion that the plaintiff is not entitled for a decree of recovery of Rs.3,52,000/-. Accordingly, issue no.1 is decided against the plaintiff. Relief
36. In view of the findings recorded hereinabove, the suit of the plaintiff is dismissed. Parties to bear their own cost.
37. Decree sheet be prepared accordingly.
38. File be consigned to Record Room after due compliance.
Pronounced in the open Court Digitally signed
by YADVENDER
YADVENDER SINGH
on this 20th Day of December, 2024. SINGH Date:
2024.12.20
19:47:04 +0530
(DR. YADVENDER SINGH)
DISTRICT JUDGE-02, SOUTH,
SAKET COURTS, NEW DELHI.
CS DJ No. 6779/2016
Page 30 of 30 Dr. Yadvender Singh/DJ-02/South/Saket/20.12.2024