Jharkhand High Court
Prabha Anthony Yadav Widow Of Late Samir ... vs Ramashankar Rai on 22 July, 2025
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
2025:JHHC:20764
IN THE HIGH COURT OF JHARKHAND AT RANCHI
F.A. No. 03 of 2023
1. Prabha Anthony Yadav widow of Late Samir Kumar Yadav, aged
about 60 years
2. Sinki @ Silki @ Shruti Gloria, daughter of Late Samir Kumar
Yadav, aged about 31 years
Sl. Nos. 1 and 2, both residents of Qr. No.7013, Sector-IV/F, P.O.
& P.S.- Sector IV, B.S. City, District- Bokaro (Jharkhand),
Presently residing at A-5, Tulsi Vihar, Vasundra Colony, Chira
Chas, P.O. & P.S.- Chira Chas, District- Bokaro (Jharkhand)
Permanent Address: Plot No.173, Navin Sahkari Griha Nirman
Samiti Ltd., Ambedkar Nagar, Gandhajor, Chira Chas, District-
Bokaro (Jharkhand) ... ... Defendants/Appellants
-Versus-
1. Ramashankar Rai, son of Late Ram Eqbal Rai, Resident of 3-249,
Sector-2/D, P.O. & P.S.- B.S. City, District- Bokaro (Jharkhand)
2. Dina Nath Roy son of Sri Ram Samujh Roy, Resident of Plot
No.125, Bari Cooperative, P.O. & P.S.- Sector-XII, B.S. City,
District- Bokaro ... ... Plaintiffs/Respondents
3. Ram Das Singh son of Late Girija Singh, resident of Qtr. No.1-
231, Sector- 2/A, P.O. & P.S.- B.S. City, District- Bokaro
... Proforma Defendant/Respondent
---
CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
---
For the Appellants : Mr. Rahul Kumar Gupta, Advocate : Mr. Shashank Shekhar, Advocate : Miss Swati Singh, Advocate : Mr. Surya Prakash, Advocate : Mr. Rakesh Kumar Singh, Advocate For the Respondents : Mr. Bhaibhaw Gahlaut, Advocate : Mr. Subhneet Jha, Advocate
---
C.A.V. on 05.03.2025 Pronounced on 22.07.2025
1. This First Appeal has been filed against the Judgment and Decree dated 30.08.2022 (Decree sealed and signed on 09.09.2022) passed by the learned Sub-Judge-IV, Bokaro in Money Suit No.62 of 2014 whereby and whereunder the money suit was decreed for recovery of Rs.29,00,000/- (Twenty-Nine Lakhs) only alongwith pendente-lite and future interest @ 8% per annum.
2. The appellants before this Court were Defendant Nos.1 and 2 in Money Suit No.62 of 2014 filed on 15.12.2014 in which the plaintiffs/ Respondent Nos.1 and 2 had prayed for the following reliefs:
12025:JHHC:20764 (A) For a decree of recovery of an amount of Rs.29,00,000/-
(Rupees Twenty-Nine Lakhs) only as principal and interest @ 18% per annum till realization, jointly and severally from the defendants.
(B) For cost of the suit.
(C) For any other relief or reliefs as the plaintiffs may be found entitled to.
Case of the Plaintiffs
3. As per the plaint of the plaintiffs, Samir Kumar Yadav (since deceased) [husband of Defendant No.1 and father of Defendant No.2] executed a deed of partnership with the plaintiffs on 29.11.2012 which was registered before Sub-Registrar, Chas, Bokaro vide Registered Deed of Partnership No.513 dated 29.11.2012.
4. Prior to execution of the Partnership Deed, Samir Kumar Yadav had induced the plaintiffs to enter into a partnership for land development business for one of the projects at Mouza- Bhawanipur @ Solagidih and told the plaintiffs that he had already invested Rs.25,00,000/- in the project and for further investment, they would be added as partners in the project and would get immense profit. Thereafter, Samir Kumar Yadav showed about 40 acres of vast tract of land bearing Plot No.1327, Khata No.96 and other plots of the same khata of Mouza Bhawanipur @ Solagidih and projected very rosy picture regarding the land development business and upon his insistence, the plaintiffs paid Rs.29,00,000/- only to Samir Kumar Yadav on different dates for land development business.
5. Initially the plaintiffs paid Rs.5,00,000/- to Samir Kumar Yadav and thereafter, due to financial crunch, they approached the Proforma Defendant Sri Ram Das Singh to provide monetary help to them for smooth running of the business. The proforma defendant Ram Das Singh had given Cheque No.49130 dated 04.01.2013 for Rs.3,00,000/- , Cheque No.49147 dated 01.02.2013 for Rs.5,00,000/-, Cheque No.341403 dated 15.03.2013 for Rs.2,50,000/- and Cheque No.341402 dated 16.03.2013 for Rs.2,50,000/-, all were of Allahabad Bank, Sector-IV Branch, in the name of Samir Kumar Yadav to the 2 2025:JHHC:20764 plaintiffs and accordingly, the plaintiffs had taken a total amount of Rs.13,00,000/- from the proforma defendant and had given the same to Samir Kumar Yadav for development of the partnership business. The plaintiffs had issued a money receipt dated 02.02.2013 to the proforma defendant in which Samir Kumar Yadav was a witness. The plaintiffs had given the rest amount of Rs.11,00,000/- in cash to Samir Kumar Yadav and Samir Kumar Yadav had issued three money receipts to the plaintiffs for a total of Rs.29 lakhs.
6. When the plaintiffs enquired about the status of the financial condition of the business, Samir Kumar Yadav did not give the actual status of the financial position of the partnership business and later on, they found that neither any land in Mauza Bhawanipur in Khata No.96 for the land development business was ever purchased by Samir Kumar Yadav nor partnership business was ever started and nothing was invested by Samir Kumar Yadav in the business and he had taken Rs.29,00,000/- from the plaintiffs by playing fraud upon them. When the plaintiffs demanded to refund their amount, Samir Kumar Yadav issued three post-dated cheques of IndusInd Bank being Cheque No.335640 dated 10.04.2014 for Rs.5,00,000/-, Cheque No.335641 dated 21.04.2014 for Rs.2,00,000/- and Cheque No.335642 dated 05.05.2014 for Rs.3,00,000/-, but after some days, Samir Kumar Yadav told the plaintiffs that he was suffering from some disease and advised them not to deposit the cheques for encashment. Thereafter, the Plaintiff No.1, in whose name the three cheques were issued, did not deposit the cheques and in the meantime Samir Kumar Yadav died on 14.05.2014.
7. The plaintiffs further stated that after death of Samir Kumar Yadav, Defendant Nos.1 and 2 inherited all the properties of Samir Kumar Yadav and they are enjoying the same. Samir Kumar Yadav had constructed a multistoried building at Chira Chas and the Defendant Nos.1 and 2 have inherited the same and are in possession of the same and enjoying the property also.
8. The plaintiffs further stated that when the Plaintiff No.1 got a legal notice issued on 14.10.2014 to the Defendant No.1 demanding 3 2025:JHHC:20764 payment of Rs.29,00,000/-, the Defendant No.1 got the legal notice replied through her lawyer on flimsy grounds.
9. The plaintiffs stated that the cause of action for filing the suit accrued on 29.11.2012, when a registered Deed of Partnership was executed between Samir Kumar Yadav and the plaintiffs and on different dates when money was paid by them to Samir Kumar Yadav and also on 14.10.2014, when a legal notice was issued to Defendant No.1 demanding repayment of Rs.29,00,000/- and the same continued from day-to-day basis within the jurisdiction of the learned trial court.
Case of the Defendant Nos.1 and 210. Defendant Nos.1 and 2 filed written statement denying all the contents including the statements, Schedule-A and the allegations contained in the plaint, save and except to the extent, the contents thereof were specifically admitted. They raised preliminary objections to the suit, inter alia, on the ground that the suit was barred under section 69 of the Indian Partnership Act, 1932 (hereinafter referred to as the "Act of 1932") as the partnership firm was not registered with Registrar of Firms as required under Sections 58 and 59 of the Act of 1932 and that partnership agreement contains a clause no-7 which provides for resolution of dispute by the arbitrator, as such in view of Section 5 of the Arbitration and Conciliation Act, 1996 the present suit was barred. It was also asserted that from a simple reading of the plaint, it was apparent that the two plaintiffs Rama Shankar Rai and Dina Nath Roy are the surviving partners of an unregistered firm constituted on 29.11.2012, deed was registered under Indian Registration Act and not under Section 59 of the Indian Partnership Act and as such the status of the partnership firm is of an "unregistered firm". It was asserted that plaintiffs' own pleadings indicated that it was not a simple money lending transaction for interest. It was some kind of business venture undertaken by the plaintiffs with a view to do capital investment contribution by each partner to 25% of the total capital and the same share in profit as well as loss of the firm and it was an admitted fact that the defendant no. 1 and 2 were neither the partners of the firm nor is there any contract in 4 2025:JHHC:20764 the said deed of partnership to admit the legal representatives of a dead partner as a partner to join the two surviving ones. Therefore, it was asserted that the plaintiffs have no cause of action against the defendants to seek any relief against them. The instant suit filed by the plaintiffs was meant for settlement of accounts between the partners but as the defendant no. 1 and 2 are not privy to the said partnership and hence the suit was liable to be dismissed in limine. It was stated that the plaint was fit to be rejected at threshold.
11. On merits it was stated that the partnership deed dated 29.11.2012 bears testimony of the terms and conditions of the partnership and other details as alleged to have been agreed amongst the partners were denied. They denied that there was any inducement by Late Samir Kumar Yadav on the plaintiffs. They were not privy to what transpired amongst the three partners in connection with or in relation to the partnership business and denied to have any knowledge as to what happened amongst the partners.
12. The Defendant Nos.1 & 2 denied the contents of paragraph 4 of the plaint by referring to the legal notice dated 14.10.2014 served upon the Defendant No.1 issued on behalf of the Plaintiff No.1, they stated that there is no reference to the proforma defendant regarding the payments made by him and the plaintiffs have claimed entire amount as their own. Therefore, if the plaintiffs' words are taken on their face value, they are not entitled to claim any payment that has been made by the proforma defendant, because proforma defendant was neither a partner of the firm, nor in anyway concerned with the said partnership business. They also denied the payments made in cash and further stated that the plaintiffs have doctored money receipts in order to further their ill will. They further stated that even if the allegations are assumed correct for the sake of argument (which does not include slightest of admission by the defendants), it shows remittance of payment to the firm in which the Defendant Nos.1 & 2 had no role to play. Referring to Paragraph 1 of legal notice dated 14.10.2014, they stated that there is no hint or suggestion that such payment was made by a stranger namely, Ram Das Singh and 5 2025:JHHC:20764 therefore, if Ram Das Singh made any contribution to the partnership firm, as put forth by the plaintiffs, the firm alone shall be responsible and otherwise also, the plaintiffs have no legal right or locus standi to claim the amount.
13. The Defendant Nos.1 & 2 claimed that there appears a deep- rooted conspiracy amongst the plaintiffs and the proforma defendant who are hell bent to encroach upon the only dwelling house of the defendant nos. 1 and 2, as reflected in para-11 of the plaint itself. They admitted that the said notice by Anand Vardhan was served on 14.10.2014, but before that the Advocate of Sri R.D. Singh conspired with Allahabad Bank to cause a legal notice upon the Defendant No.1 demanding Rs.29,99,522.13. The said notice was replied to by the Defendant No.1 through her lawyer wherein details of C.C. A/c No.2098224324 was demanded, but the bank never replied to the said notice. Further case of the Defendant Nos.1 & 2 was that the Defendant No.1 filed an application under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as SARFAESI, Act,2002) and the Rules framed thereunder before the Debt Recovery Tribunal, Ranchi praying therein for relief of setting aside / quashing the notice dated 08.09.2014 and 07.10.2014 issued by the bank upon the Defendant No.1. As per the defendant nos. 1 and 2, it appeared that after receiving the notice from DRT, Ranchi, the proforma defendant entered into conspiracy with the plaintiffs to set forth a claim of Rs.29 Lakhs. The Defendant Nos.1 & 2 also stated that they do not know about the assets or land owned by the partnership firm and as such, the statement made in relation to Khata No.96, Mouza-Bhawanipur was denied. The Defendant Nos.1 & 2 stated that they are not aware of issuance of any such cheques by Late Samir Kumar Yadav and all the documents, cheques, etc. related to the partnership business were kept at the partnership office situated at E2, Centre Market (Laxmi Market), Sector-4, B.S. City, as provided in Clause-1 & 2 of the deed of partnership dated 29.11.2012. They claimed that the plaintiffs gathered all the documents, instruments and 6 2025:JHHC:20764 records kept in the partnership office after death of Late Samir Kumar Yadav.
14. The Defendant Nos.1 & 2 stated that after death of Samir Kumar Yadav on 14.05.2014, the plaintiffs did not inform them in particular or public in general as to whether the plaintiffs as surviving partners have reconstituted the partnership firm or not. They referred to Section 42(c) of the Act of 1932 which provides that a partnership firm dissolves on death of a partner and in case there are more than two partners, the surviving partners are free to reconstitute the firm and continue with the project.
Case of the Proforma Defendant No.3
15. Proforma Defendant No.3 filed written statement stating that Samir Kumar Yadav (since deceased) had induced him to advance loan as he was in dire need of money for business purposes. He further stated that Samir Kumar Yadav alongwith the plaintiffs had come at his residence and the plaintiffs had proposed that they would execute money receipt in which Samir Kumar Yadav would be a witness and the entire amount would be transferred to Samir Kumar Yadav for the business of development of the land. The proforma defendant further stated that the plaintiffs as well as Samir Kumar Yadav had assured him that his money would be safe and the plaintiffs would pay the amount from their share.
16. Thereafter, the proforma defendant submitted an application for enhancement of his cash credit limit in Allahabad Bank which was approved and his cash credit limit was enhanced from Rs.20,00,000/- to Rs.30,00,000/-. Samir Kumar Yadav became a guarantor and the proforma defendant deposited title deed of the landed property measuring 06 decimals bearing Plot No.1606 (Navin Co-operative Plot No.173), Khata No.01, which was purchased through Registered Sale Deed No.385 dated 21.01.2006, in the name of Samir Kumar Yadav as collateral security. Thereafter, the proforma defendant gave altogether Rs.13,00,000/- to Samir Kumar Yadav vide Cheque No.049147 dated 01.02.2013 for Rs.5,00,000/-, Cheque No.049130 dated 04.01.2013 for Rs.3,00,000/-, Cheque No.341403 dated 7 2025:JHHC:20764 15.03.2013 for Rs.2,50,000/- and Cheque No.341402 dated 16.03.2013 for Rs.2,50,000/- of Allahabad Bank for business purpose, but Samir Kumar Yadav used the said amount for personal purposes and there was no land development business of Samir Kumar Yadav. He further stated that huge financial liability incurred upon him due to payment of interest on the loan amount advanced to Samir Kumar Yadav.
17. While giving para-wise reply to the plaint, the proforma defendant stated that the contents of Para-1 of the plaint are not within his knowledge. With regard to the statements made in Para-2 and 3 of the plaint, he stated that Samir Kumar Yadav had induced the plaintiffs and the proforma defendant that he had started land development project at Mouza Bhawanipur @ Solagidih and taken Rs.29,00,000/- from the plaintiffs and the proforma defendant. He further stated that Samir Kumar Yadav had shown vast tract of land bearing Plot No.1327 and other plots of Khata No.96, Mouza Bhawanipur @ Solagidih and had projected very rosy picture about the land development business.
18. The plaintiffs and Samir Kumar Yadav had approached him and upon their insistence, he had paid a total amount of Rs.13,00,000/- only to Samir Kumar Yadav, but Samir Kumar Yadav had kept the plaintiffs and him in dark about the actual fact that Samir Kumar Yadav had no right, title, interest and possession over the land of Khata No.96, Mouza Bhawanipur @ Solagidih and had taken the amount from them by playing fraud upon them. Out of the total amount of Rs.29,00,000/- shown by the plaintiffs, he had paid Rs.13,00,000/- to Samir Kumar Yadav at the insistence of the plaintiffs. He further stated that Samir Kumar Yadav never divulged the actual status of his business and on enquiry they found that Samir Kumar Yadav had no land for land development business and no land had ever been purchased by him for land development business and in order to deceive them, Samir Kumar Yadav had taken a total amount of Rs.29,00,000/- only by playing fraud upon them and in fact no partnership business was started between the plaintiffs and Samir 8 2025:JHHC:20764 Kumar Yadav. The proforma defendant stated that Rs.5,00,000/- had accrued as interest on the principal amount of Rs.13,00,000/- paid to Samir Kumar Yadav and when the bank threatened him that his account will be declared N.P.A., he had paid the interest on the principal amount. The proforma defendant intended to file a counter claim at a later stage against the plaintiffs and Defendant Nos.1 and 2 who being the legal heirs of Samir Kumar Yadav have inherited the properties of Samir Kumar Yadav and are enjoying the same. With respect to the reliefs sought for in the plaint, the proforma defendant stated that the plaintiffs are entitled to decree of recovery of the amount with interest. The proforma defendant prayed to allow the suit of the plaintiffs.
19. On the basis of the pleadings of the parties, the learned trial court framed altogether six issues for consideration, which are as under:
1. Whether the suit is maintainable in its present form?
2. Whether the plaintiff has got any cause of action for the present suit?
3. Whether the suit is barred by Section 69(2) of Indian Partnership Act, 1932?
4. Whether the suit is barred by Section 5 of Arbitration and Conciliation Act, 1996?
5. Whether the plaintiffs are entitled for an amount of Rs.29,00,000/- only as principal and interest @ 18% per annum till realization, jointly and severally from the defendants?
6. Whether the plaintiffs are entitled to get any other relief/reliefs to which he is entitled to in law and equity?
20. Plaintiffs and proforma defendant no. 3 adduced both oral and documentary evidences but Defendant nos. 1 and 2 did not adduce any evidence in spite of repeated opportunities.
21. The learned trial court considered the materials available on record and recorded its findings in Paragraphs 9 to 15 of the Judgment. Issue nos. 1 and 2 were taken up together, and it was held that there was specific assertion of the plaintiffs that by playing fraud upon the plaintiffs, Rs.29,00,000/- was taken by Samir Kumar Yadav, 9 2025:JHHC:20764 husband of Defendant No.01 and father of Defendant No.02 and in order to make part payment of Rs.10,00,000/-, Samir Kumar Yadav during his lifetime issued three cheques in favour of the plaintiffs and thus, it was crystal clear that a case of civil liability was made out against the defendant nos.01 & 02, who were enjoying the movable and immovable properties left by Samir Kumar Yadav and the instant suit was filed within the period of limitation, as such the suit was maintainable. It was also held that the plaintiffs have proved all the facts which they have averred in the plaint and have made out cause of action for filing the suit. The Issue No.01 & 02 were decided in favour of the plaintiffs and against the defendants. Issue no. 3 was decided vide paragraph 10 of the judgement and it was ultimately held that the bar of Section 69(2) of the Act of 1932 doesn't apply to the present case and the Issue No. 03 was decided in favour of the plaintiffs and against the Defendant Nos. 1 & 2 by observing that actually no partnership business had initiated, rather by playing fraud and deception, Samir Kumar Yadav took Rs.29,00,000/- from the plaintiffs including Rs.13,00,000/- from proforma defendant/Defendant No.03 and in order to repay the amount, he issued three cheques and in the meantime he died. It has been held that the transaction in question was clearly between the parties for the purpose of business and Samir Kumar Yadav by playing fraud upon the plaintiffs and the Defendant No.03 took Rs. 29,00,000/- from them and no evidence was adduced by the Defendants that actually the partnership business had started and vast tract of land was in the name of Samir Kumar Yadav and the same was incorporated for the partnership business. It has been held that the bar of Section 69(2) of the Act of 1932 does not apply to the present case, and the Issue No. 03 was decided in favour of the plaintiffs and against the Defendant No.01 & 02.
Issue no. 4 was decided vide paragraph 11 of the judgment and it was held that it was clear that the judicial authority can decide the matter in respect of disputes even if there is arbitration clause unless and until a party to the arbitration agreement before filing his first 10 2025:JHHC:20764 statement submits before the Judicial authority to refer the matter to the arbitrator. It was observed that in the instant case, no such petition has been filed by the Defendant No.01 & 02 to refer the matter to the arbitrator by invoking the arbitration clause. Apart from that the Defendant No.01 & 02 are not the parties of the arbitration agreement (i.e. deed of partnership) having arbitration clause. It was held that the submission of the Defendant No.01 & 02 that the suit was barred by Section 5 of the Arbitration and Conciliation Act, 1996 was misplaced one and does not find any support from Arbitration and Conciliation Act, 1996 and as such the Issue No. 04 was decided in favour of the plaintiffs and against the defendant nos. 01 & 02. The issue no. 5 was decided vide paragraph 12 of the judgment in favour of the plaintiffs and the suit was decreed with interest @8% per annum instead of 18% per annum as claimed. The findings with regards to the issue no. 5 are quoted as under: -
12. Issue No. 5 - "Whether the plaintiffs are entitled for an amount of Rs.29,00,000/- only as a principal and interest @ 18% per annum till realization jointly and severally from the defendants?"
As discussed above, it is apparently clear that the plaintiffs had paid Rs.29,00,000/- including the amount of Rs.13,00,000/- by taking amount from proforma Defendant No.03, which he took from bank by enhancing his cash credit limit on the assurance given by Samir Kumar Yadav (husband of the Defendant No.01 and the father of the defendant no. 02) and Samir Kumar Yadav (since deceased) had acknowledged the receipt of Rs.29,00,000/- by issuing three money receipts (vide Exhibit No. 2, 2/1 and 2/2) in favour of the plaintiffs. Furthermore, it is uncontroverted evidence on record that there was no partnership business and the amount was taken by Samir Kumar Yadav by projecting very rosy picture of land development business, though actually there was not land in Bahwanipur Mouza in the name of Samir Kumar Yadav and when the plaintiffs and Defendant No.03 got information that the amount was taken by Samir Kumar Yadav by playing fraud upon them, they started to making demand of their due amount and in order to make payment Samir Kumar Yadav issued three cheques having total amount of Rs.10,00,000/- vide Exhibit- 3, 3/1 and 3/2 but the said cheques could not be encashed as owing to deteriorating health conditions of Samir Kumar Yadav 11 2025:JHHC:20764 as he told the plaintiffs not to encash the said cheques because the amount was required for his treatment. After death, it is admitted that Defendant No.01 & 02 are enjoying the property left by Samir Kumar Yadav. Moreover, the Defendant No.03 is paying interest on the loan amount of Rs.13,00,000/- which he had given to Samir Kumar Yadav on the undertaking/guarantee given by the plaintiffs. The Defendant No.03 has also proved the money receipt vide Exhibit-A and the bank statement vide Exhibit 'B' which clearly reflect that Rs.13,00,000/- was given to Samir Kumar Yadav and Samir Kumar Yadav mortgaged his sale deed of land in the bank. From the oral and documentary evidence, it clearly emerges that Rs.29,00,000/- was paid to Samir Kumar Yadav and the legal heirs of Samir Kumar Yadav are enjoying the immovable and movable properties of Samir Kumar Yadav and Samir Kumar Yadav was legally bound to pay/refund the said sum to the plaintiffs during his lifetime and in order to make payment, he had already issued three cheques having total amount of Rs. 10,00,000/- and the Defendant No.01 & 02 have not rebutted any evidence in respect of payment of Rs.29,00,000/- to Samir Kumar Yadav nor adduced any evidence that they have not come in possession of any movable and/or immovable property of Samir Kumar Yadav. So, the Defendant No.01 & 02 are bound to pay Rs.29,00,000/- with interest to the plaintiffs and Issue No. 5 is also decided partially in favour of the plaintiffs and against the Defendant No.01 & 02.
13. There is nothing on record to rebut aforesaid oral as well as documentary evidence of the plaintiff by the defendant no.1 and 2. This has also strengthened the claim of the plaintiff. In these circumstances and from the aforesaid oral as well as documentary evidence placed on record by the plaintiff, this court is of the view that the plaintiff have succeeded in proving this case.
14. At this point, it would be judicious to highlight the law laid down by the Hon'ble Apex court in Central Bank of India Versus Ravindra.....................................................
15. As the sequitur to the foregoing analysis this court is of considered view that plaintiffs have succeeded in proving its case. Hence, the suit of plaintiff is decreed for recovery of Rs.29,00,000/- (Twenty-Nine Lakhs) only alongwith pendente- lite and future interest at the rate of 8% per annum, decree- sheet shall be prepared accordingly file to be consigned to the record-room after due compliance."12
2025:JHHC:20764
22. Thus, the learned trial court decreed the suit in favour of the plaintiffs for recovery of Rs.29,00,000/- (Twenty-Nine Lakhs) only alongwith pendente-lite and future interest at the rate of 8% per annum against the defendant nos. 1 and 2.
23. Arguments of the appellants ( defendant no. 1 and 2) .
I. The partnership was not registered with the Registrar of the Firms in terms of Section 58 and 59 of the Act of 1932 and the suit was barred under section 69 of the Act of 1932 and the plaintiffs cannot file a suit to enforce a right arising from a contract i.e. partnership agreement particularly against Samir Kumar Yadav or his legal heirs.
II. The plaintiffs have tried to make out a case that because Samir Kumar Yadav had defrauded them by taking the suit amount by projecting a very rosy picture before them, said bar under Section 69 of the Act of 1932 would not be applicable. Thus, for the purpose of getting over the bar under Section 69 of the Act of 1932, the plaintiffs are required to prove that Samir Kumar Yadav had committed fraud upon them, and it is only if they are able to establish that Samir Kumar Yadav had committed fraud, their suit would be maintainable. Therefore, it is essential to see as to whether the plaintiffs had actually been able to prove as to whether Samir Kumar Yadav committed fraud upon them or not. III. From perusal of the statement made in the plaint, it appears that before entering into the deed of partnership, Samir Kumar Yadav had told the plaintiffs about the land development business and had also showed them vast tract of land pertaining to Khata No.96, Plot No. 1327 and other plots of same Khata of mauza Bhawanipur. According to the statement made in the plaint as well as evidences adduced on behalf of the plaintiffs, no date whatsoever was mentioned as to when the plaintiffs came to know about the alleged fraud. The partnership agreement was entered into in the year 2012 on 29.11.2012 and Samir Kumar Yadav died on 14.05.2014. According to the plaintiffs' own case, the plaintiffs came to know about the fraud and they found that actually no land for development business was ever purchased by 13 2025:JHHC:20764 Samir Kumar Yadav; actually, no partnership business was started as nothing was invested by Samir Kumar Yadav in the business and he had taken Rs. 29 lakhs from the plaintiffs by playing fraud upon them, and the plaintiffs have further stated that the plaintiffs started making demand of refund of the amount whereafter Samir Kumar Yadav issued three cheques which were not encashed on the request of Samir Kumar Yadav.
IV. Rama Shankar Rai, the plaintiff no.1 was examined as PW-1 who in Paragraphs 42 and 53 of his cross-examination has stated that he did not give any written notice to Samir Kumar Yadav and he further stated that he had verbally told to Samir Kumar Yadav, but he did not give any written notice to him.
V. Order VI Rule 4 of CPC very clearly stipulates that any person who is alleging fraud has to give particulars of fraud. In the instant case, the plaintiffs only made general allegation of fraud and were not able to prove or furnish particulars of fraud as required under the said provision. The plaintiffs have failed to furnish particulars of fraud, but on the other hand, the facts of the instant case would go to show that even according to the plaintiffs' case, they all were acting in furtherance of the partnership deed as partners.
VI. The following would go to show that they all along with Samir Kumar Yadav were acting in furtherance of the partnership deed executed by and between them: -
(i) According to their own statement made in the plaint when they (plaintiffs) had financial crunch, they (plaintiffs) approached the proforma defendant Sri Ram Das Singh to provide monetary help to them for the development of business and said proforma defendant had agreed to pay the said amount to the plaintiffs, so that the plaintiffs may give the said amount to Samir Kumar Yadav for smooth running of the business. It is at their request, Mr. Ram Das Singh (the proforma respondent) paid a sum of Rs. 13 lakhs to the plaintiffs for investment in the partnership business and all the 14 2025:JHHC:20764 investment of Rs. 13 lakhs of Mr. Ram Das Singh was shown as invested by the plaintiffs in the partnership business.
(ii) Thus, at best any amount which was paid by Mr. Ram Das Singh or the plaintiffs, was according to the plaintiffs own case invested in the partnership business, and according to the plaintiffs' own case, Mr. Ram Das Singh i.e. the proforma defendant, after making payment of Rs. 8 lakhs, had demanded proof of his payment to the plaintiffs and it is the plaintiffs who executed money receipt dated 02.02.2013 showing that the suit amount was being given in the partnership business of the plaintiffs, and in the said money receipt Samir Kumar Yadav only signed as witness. Thus, the money receipt dated 02.02.2013 was given by the plaintiffs to Mr. Ram Das Singh and Samir Kumar Yadav had only signed as witness.
(iii) If the law laid down by Hon'ble Supreme Court is applied, it can be very clearly seen that the plaintiffs have failed to plead as well as prove forgery on the part of Samir Kumar Yadav and no details of fraud were ever disclosed or even evidence regarding the said fraud was ever given. Therefore, the plaintiffs have thoroughly failed to prove the alleged fraud committed by Samir Kumar Yadav. Once, it is held that the plaintiffs had failed to prove the fraud committed by Samir Kumar Yadav, only logical consequence would be that the plaintiffs according to their own case had entered into the partnership business with Samir Kumar Yadav and they had invested in the partnership business as partners of the firm and therefore whatsoever transaction took place between three partners, the other partners could not have diverted the fact of investment made in the partnership business as personal liability of Samir Kumar Yadav.
Therefore, the instant suit was clearly barred in terms of 15 2025:JHHC:20764 Section 69(1) of the Act of 1932 as the plaintiffs were partners of unregistered partnership firm and they could not have sued another partner of the same unregistered firm. The only exception was that the plaintiffs being partners of unregistered firm could have sought for dissolution of firm or for accounts of the dissolved firm, or could have exercised any right or power to realize the property of the dissolved firm. The plaintiffs in fact have not filed any suit for dissolution of accounts of the firm and, therefore, they are not covered by the exception carved out in Section 69 of the Act of 1932. Thus, the suit is barred in terms of Section 69 (1) of the Act of 1932.
(iv) From the statement made in the plaint itself, it transpires that it is the plaintiffs who were facing financial crunch and therefore they had approached the proforma respondent Sri Ram Das Singh to provide monetary help to them for the development of business, and that proforma defendant had agreed to pay the said amount to the plaintiffs so that the plaintiffs may give the required amount to Samir Kumar Yadav for smooth running of the business.
It is the plaintiffs who had taken Rs.13 lakhs from the proforma defendant namely Sri Ram Das Singh and it is the plaintiffs who executed money receipt dated 02.02.2013 and Samir Kumar Yadav had only signed as witness. On the contrary, the defendant no.3 namely Sri Ram Das Singh has stated that he paid total sum of Rs. 13 lakhs to the plaintiffs as well as defendant no. 1 & 2, and therefore Sri Ram Das Singh had reserved the right to file a counter claim against the plaintiffs as well as the defendant nos. 1 and 2 but did not file any such counter claim.
VII. The learned counsel for the appellants relied upon the following judgments:
162025:JHHC:20764
(i) (1994) 1 SCC 502 (Svenska Handelsbanken Vs. M/s Indian Charge Chrome) Paragraph- 40
(ii) (2022) 2 SCC 573 (Electrosteel Castings Limited Vs. UV Asset Reconstruction Company Limited) Paragraph- 9 to 12
(iii) (2024) 8 SCC 700 (Annapurna B. Uppin Vs. Malsiddappa) Paragraph- 16
(iv) 2025 SCC Online SC 125 (Sunkari Tirumala Rao Vs. Penki Aruna Kumari) Paragraph- 15 and 16
(v) (2009) 10 SCC 103 (Branch Manager, Magma Leasing and Finance Limited Vs. Potluri Madhavilata) Paragraph-17 and 18
(vi) (2015) 14 SCC 444 (Sundaram Finance Limited Vs. T. Thankam) Paragraph- 8 and 13
24. Arguments on behalf of Respondent Nos.1 & 2/Plaintiffs A. The Respondent Nos.1 & 2 in their written submissions stated that they had instituted the money suit for recovery of Rs.29,00,000 (along with interest @18%) which was given to Samir Kumar Yadav (deceased husband of Defendant No.1 & father of Defendant No.2), who had fraudulently induced them into investing Rs.29,00,000/- by falsely claiming to start a land development project at Mouza Bhawanipur, that never existed.
B. When the plaintiffs came to know that there existed no land in Mouza Bhawanipur, they demanded their money back from Samir Kumar Yadav and though Samir Kumar Yadav issued three post-dated cheques (Exhibit-3, 3/1, 3/2), but died subsequently.
C. The plaintiffs in order to prove their case, provided money receipts (Exhibits- 2, 2/1, 2/2) and cheques (Exhibits- 3, 3/1, 3/2) signed by Samir Kumar Yadav proving receipt of Rs.29,00,000/-.
D. After death of Samir Kumar Yadav, the plaintiffs sent a legal notice to the Defendant No.1 on 14.10.2014 (Exhibit-4) demanding Rs.29,00,000/-. However, instead of making 17 2025:JHHC:20764 payment, Defendant No.1 replied vaguely through her lawyer and denied making payment.
E. The Respondent Nos.1 & 2 further stated that the instant suit is a case of civil liability against the appellants and the claim of the plaintiffs is a common law right.
F. The Respondent Nos.1 & 2 relied upon the Judgment passed by the Hon'ble Patna High Court in the case of Ram Narayan Renu v. The State of Bihar & Ors., (L.P.A. No. 66 of 2006), wherein it was observed that right to recover money lost to the plaintiff by reason of an action or inaction on the part of the defendant is a common law right unless there is an express bar for exercise of such common law right or withdrawal of such right by an expressed provision of law, or unless the same can be gathered by necessary implication.
G. The Respondent Nos.1 & 2 further stated that Section 9 of Code of Civil Procedure (in short 'CPC') only deals with the jurisdiction of the Court to try suit. However, for instituting a suit two pre-requisites must be fulfilled. The first requirement which is fundamental to the maintainability of a Civil Suit is the existence of a cause of action and the other pre-requisite for instituting a suit is that the plaintiff must have right to sue and right to sue is a common law or inherent right.
H. The Respondent Nos.1 & 2 referred to the judgment passed in the case of Ganga Bai v. Vijai Kumar, AIR 1974 SC 1126 Para-15, wherein it has been held that there is an inherent right in every person to bring a suit of a civil nature unless the suit is barred by statute.
I. The Respondent Nos.1 & 2 also referred to the judgment passed in the case of Shiv Kumar Chadha v. Municipal Corpn. of Delhi, 1993 (3) SCC 161, wherein it was held that under classical law, the position is that where there is a right there is a remedy. The position regarding special Acts creating rights and liabilities was also clarified in paragraph 11 of the aforesaid judgment, which is quoted below:
182025:JHHC:20764 "11. In the olden days the source of most of the rights and liabilities could be traced to the common law. Then statutory enactments were few. Even such enactments only created rights or liabilities but seldom provided forums for remedies. The result was that any person having a grievance that he had been wronged or his right was being affected, could approach the ordinary Civil Court on the principle of law that where there is a right there is a remedy-ubi jus ibi remedium. As no internal remedy had been provided in the different statutes creating rights or liabilities, the ordinary Civil Courts had to examine the grievances in the light of different statutes. With the concept of the Welfare State, it was realised that enactments creating liabilities in respect of payment of taxes obligations after vesting of estates and conferring rights on a class of citizens, should be complete codes by themselves. With that object in view, forums were created under the Acts themselves where grievances could be entertained on behalf of the persons aggrieved. Provisions were also made for appeals and revision to higher authorities."
J. Reference may also be made to the second principle mentioned in Paragraph 23 of the judgment passed in the case of "Premier Automobiles v. K.S. Wadke" AIR 1975 SC 2238 [which has also been quoted in "Rajasthan SRTC v. B.M. Bairwa" 2009 (4) SCC 299] where in the context of industrial dispute it has been held that arising out of a right or liability under the general or common law and not under the Act, the jurisdiction of the civil court is alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is competent to be granted in a particular remedy.
K. In the present suit, a perusal of Exhibit- 2, 2/1 & 2/2 would make it apparent that Samir Kumar Yadav (in his individual capacity) took money from the Plaintiffs for investing in a land development project. However, as per para 7 of the plaint, the Plaintiffs came to know on enquiry that no land for land development business was ever purchased by Samir Kumar Yadav and in order to deceive the Plaintiffs, Samir Kumar Yadav executed a deed of partnership dated 29.11.2012 19 2025:JHHC:20764 (Exhibit 1). But after receiving money from the Plaintiffs (both directly and through the Proforma Defendant No. 3), Samir Kumar Yadav played fraud upon the Plaintiffs and diverted the funds for his personal use. It is pertinent to mention that although as per clause 6 of the deed of partnership dated 29.11.2012, it was mandatory to open a bank account in the name of the firm in question, no such account was opened by Samir Kumar Yadav. Thus, the entire money was taken by Samir Kumar Yadav in his personal capacity [as evident from para 43 of the cross-examination of Plaintiff No. 1, para 2(d) of the written-statement filed by Defendant No. 3]. The said fact is also evident from the perusal of Exhibit 3, 3/1 & 3/2, by which Samir Kumar Yadav, in his personal capacity, had issued three post-dated cheques (as part payment) in the name of Plaintiff No. 1 when the Plaintiffs after discovery of fraud by Samir Kumar Yadav demanded the amount of Rs. 29,00,000/- paid to him. As such, the plaintiffs have a common law right to recover their lost money from Samir Kumar Yadav in his personal capacity.
L. The bar under Section 69(2) of the Act of 1932 does not apply while enforcing a common law right. They further stated that the appellants argued that the instant suit is barred under Section 69(2) of the Act of 1932, as the partnership firm was unregistered, but as per them, the learned court below has rightly held that since no actual business was conducted and the suit was based on allegation of fraud, the bar under Section 69(2) does not apply.
M. It is to be noted that Section 69(2) of the Act of 1932 bars only enforcement of those rights that arise from (1) contract and (2) partnership act. In the instant case, the plaintiffs have not filed the suit in the capacity of partner, nor have they made the firm as a defendant in the Suit. In fact, the suit was filed for recovery of money that was fraudulently taken by Samir Kumar Yadav, in his personal capacity.
202025:JHHC:20764 N. They further stated that Section 69(1) of the Act bars enforcement of right by or on behalf of a person suing as a partner and against the person who has been a partner. Thus, the very object of Section 69(1) of the Act is that if a person intends to take the benefit of partnership act, then he has to comply with the mandatory requirement of registration under Section 59 of the Act of 1932. It has been submitted that the Plaintiffs have not filed the Suit in the capacity of partner nor have they sued Samir Kumar Yadav as a partner of the partnership firm. Thus, the common law right of the plaintiffs to recover money fraudulently taken by Samir Kumar Yadav cannot be taken away by virtue of Section 69 of the Act of 1932.
O. The Respondent Nos.1 & 2 further stated that for further clarification, the judgement of the Hon'ble High Court of Madras in the case of "S. Prakashchand Vs. Sha Harakchand Misrimull & Ors." reported in 2003 (2) LW 740, paragraph 9 can be relied upon. They further stated that the very object and purpose of disability imposed on an unregistered firm would become clear from the judgment of the Hon'ble Supreme Court of India in "Shiv Developers, through its Partner Sunilbhai Somabhai Ajmeri v. Aksharay Developers & Ors" reported in 2022 SCC Online SC 114, wherein the Hon'ble Court in Para- 20, clarified the nature of suits filed by an unregistered partnership firm which will not be barred under Section 69(2) of the Partnership Act, 1932. The instant Suit cannot be said to be the one for enforcement of right arising from a contract, rather the Suit is clearly the one where the Plaintiffs have sought common law remedies with the allegations of fraud. P. The Respondent Nos.1 & 2 further stated that the bar under Section 5 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act of 1996") is not applicable. It is settled law that an application under Section 8 of the Act of 1996 has to be filed by a party to a Suit who is seeking 21 2025:JHHC:20764 reference of the dispute to arbitration under Section 5 of the Act of 1996. Reliance has been placed on the judgment passed by the Hon'ble Bombay High Court in the case of "Garden Finance Ltd. v. Prakash Inds. Ltd. & Anr." reported in AIR 2002 BOM 8, para 9 and the judgment passed by the Hon'ble High Court of Karnataka in the case of "Y. Harish & Anr. V. Y. Satish & Ors." [W.P. No. 10716 of 2022 (GM-CPC)], para
11. In the present suit, as no application under Section 8 of the Act of 1996 was filed by the appellants to refer the matter to arbitrator by invoking the arbitration clause, the learned trial court had jurisdiction to decide the instant suit by virtue of Section 9 of CPC.
Q. The suit is not barred under Order VI Rule 4 CPC which reads as under:
"4. Particulars to be given where necessary. In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading."
R. They further stated that it is evident from the aforesaid provision that only those particulars are to be mentioned in the plaint which are necessary for the proper adjudication of the Suit. In the instant case, the Plaintiffs in paragraphs 7 & 8 of the plaint, have made specific averments on fraud. Further, the allegation of fraud has also been clearly stated in paragraphs 8 and 27 of statement on affidavit of Plaintiff No.1 Furthermore, the averment of fraud has also been stated in paragraph 8 of the statement on affidavit of Plaintiff No. 2, and also in Para-2(d) & 6 of the written-statement filed by the proforma defendant no.3. They further stated that the date of discovery of fraud is not necessary in this suit, for the following reasons:
222025:JHHC:20764 a. Section 17 of the Limitation Act provides that the period of limitation shall not begin to run until the Plaintiff has discovered fraud.
b. The Plaintiffs have filed the instant Suit on 15.12.2014, and the entire sum of Rs. 29 lakhs was paid by the Plaintiffs after the deed of partnership dated 29.11.2012.
S. The suit was filed within the limitation period and the Plaintiffs were not seeking any benefit on limitation on the ground of date of discovery of fraud and hence, the suit was not hit by Order VI Rule 4 of CPC.
T. The Respondent Nos.1 & 2 further stated that the plaintiffs have also a right to recover Rs.13,00,000/- paid through the Proforma Defendant No.3 on the following basis:
(i) Samir Kumar Yadav, by way of money receipts (Exhibits 2, 2/1 and 2/2) had admitted that he had received the entire amount of Rs. 29,00,000 from the plaintiffs.
(ii) The Proforma Defendant No.3 in Para 2(b) of his written-
statement has stated that the liability to repay the amount paid by him to Samir Kumar Yadav lies with the plaintiffs.
(iii) By way of Exhibit A (exhibited by proforma defendant No.3), the plaintiffs had taken upon themselves the liability to repay the amount paid to Samir Kumar Yadav by Proforma Defendant No. 3.
U. Accordingly, it was stated by the Respondent Nos.1 & 2 that Rs. 29 lakhs were paid to Samir Kumar Yadav and the appellants - the legal heirs of Samir Kumar Yadav are enjoying his immovable and movable properties. Further, Samir Kumar Yadav was legally bound to pay/refund the said sum to the plaintiffs during his lifetime and in order to make payment, he had already issued three cheques having total amount of Rs. 10 lakhs. The appellants have not rebutted any evidence in respect of the payment of Rs. 29 lakhs to Samir Kumar Yadav, nor adduced any evidence that they have not come in possession of 23 2025:JHHC:20764 any movable and/or immovable property of Samir Kumar Yadav. As such, the plaintiffs are entitled for the recovery of Rs. 29 lakhs.
V. Thus, in light of the aforesaid submissions, it was prayed that the instant First Appeal be dismissed and the Judgment dated 30.08.2022 passed in Money Suit No. 62 of 2014 by the trial court be upheld.
25. The learned counsel for the Respondent Nos.1 and 2 relied upon the following judgments:
(i) LPA No. 66 of 2006 (Ram Narayan Renu v. The State of Bihar and Others), Paragraph-8
(ii) (1993) 3 SCC 161- (Shiv Kumar Chadha v. Municipal Corporation of Delhi & Others), Paragraphs 11, 12, 23 and 24
(iii) CRL O.P. No. 13147 of 2015 & Crl. M.P. Nos. 1 and 2 of 2015, Paragrphs 13 and 14
(iv) 2022 SCC Online SC 114-(Shiv Developers through its Partner Sunilbhai Somabhai Ajmeri v. Aksharay Developers and others, Paragraph 20
(v) AIR 2002 Bom 8 (Garden Finance Ltd. V. Prakash Inds. Ltd. And Another), Paragraphs 8 and 9
(vi) W.P. No. 10716 of 2022 (Y. Harish & Anr. v. Y. Satish and Others) (GM-CPC), Paragraph 11
(vii) 2009 (4) SCC 299 (Rajasthan SRTC v. Bal Mukund.
Bairwa), Paragraph 22
(viii) AIR 1974 SC 1126 (Ganga Bai v. Vijay Kumar), Paragraph 15
26. The following points for determination arise for consideration in this appeal:
(i) Whether the plaintiffs could have claimed a sum of Rs.13 lakhs on behalf of Ram Das Singh i.e. proforma defendant?24
2025:JHHC:20764
(ii) Whether the suit was barred by Section 5 r/w Section 8 of the Arbitration and Conciliation Act, 1996?
(iii) Whether the plaintiffs have properly pleaded and also proved the allegation of fraud against Samir Kumar Yadav?
(iv) Whether the suit was barred by Section 69(2) of the Indian Partnership Act, 1932?
(v) Whether the suit was barred by Section 69(1) of the Indian Partnership Act, 1932?
Findings of this Court
27. The plaintiffs examined 03 witnesses; PW-1 is Rama Shankar Rai (Plaintiff No.1) and PW-2 is Dina Nath Roy (Plaintiff No.2). Both were the partners in the Deed of Partnership No.513 dated 29.11.2012. They filed their examination-in-chief on affidavits reiterating the facts mentioned in the plaint and supported their case.
28. PW-1 filed his examination-in-chief stating that he is well acquainted with the facts of this case. He further stated that the husband of defendant No.1 and father of defendant No.2 namely Samir Kumar Yadav had approached the plaintiffs and had induced them to invest money in the project of land development business situated in plot No.1327, Khata No.96 at Bhawanipur/Solagidih and other plots measuring 40 acres. He further stated that he has already invested Rs.25,00,000/- in the project. Believing the version of Samir Kumar Yadav, the plaintiffs gave Rs.29,00,000/- from 29.11.2012 to 25.05.2013 to Samir Kumar Yadav. Thereafter, Samir Kumar Yadav prepared a deed of partnership No.513, but the said deed of partnership was never implemented. The plaintiffs had paid Rs.5,00,000/- on 10.12.2012, Rs.50,000/- on 25.01.2013, Rs.50,000/- on 28.12.2012 and Rs.10,00,000/- on 24.05.2013 in cash to Samir Kumar Yadav and when they felt shortage of money, on the advice of Samir Kumar Yadav, he took a total amount of Rs.13,00,000/- from Ram Das Singh vide Cheque No.49130 dated 04.01.2013 for Rs.3,00,000/-, Cheque No.49147 dated 01.02.2013 for Rs.5,00,000/-, 25 2025:JHHC:20764 Cheque No.341403 dated 15.03.2013 for Rs.2,50,000/- and Cheque No.341402 dated 16.03.2013 for Rs.2,50,000/-, all of Allahabad Bank and gave the same to Samir Kumar Yadav, which he had deposited in his account and had received the amount. On the demand of Ram Das Singh, they had issued a receipt to Ram Das Singh in which Samir Kumar Yadav and A.K. Pandey had put their signatures as witnesses. PW-1 further stated that Samir Kumar Yadav had issued three receipts dated 04.01.2013, 01.02.2013 and 25.05.2013 to the plaintiffs. Thereafter, when the plaintiffs enquired Samir Kumar Yadav about the work, he deferred on one or the other pretext. When the plaintiffs themselves went to the site of Bhawanipur Mouza for enquiry, they came to know that Samir Kumar Yadav had deceived them and misappropriated the money and neither Samir Kumar Yadav had any title in Bhawanipur Mouza, nor he had started any work. When the plaintiffs demanded the money from Samir Kumar Yadav repeatedly, Samir Kumar Yadav issued three cheques of IndusInd Bank i.e. Cheque No.335640 for Rs.3,00,000/-, Cheque No.335641 for Rs.2,00,000/- and Cheque No.335642 for Rs.5,00,000/- to the plaintiffs. But after some days, Samir Kumar Yadav told the plaintiffs that he was suffering from some disease and needed money for his treatment and requested them not to deposit the cheques for encashment. Therefore, the Plaintiff No.1 did not deposit the cheques and in the meantime Samir Kumar Yadav died on 14.05.2014. But before his death, Samir Kumar Yadav had constructed a multi- storeyed building in Chira Chas and the Defendant No.1 and 2 have inherited the entire movable and immovable property of Samir Kumar Yadav and they are enjoying the same. PW-1 further stated that when the plaintiffs demanded money from the defendant Nos.1 and 2, they did not repay the amount. Thereafter, on 14.10.2014 the plaintiff No.1 issued a legal notice to the defendant No.1 demanding Rs.29,00,000/-, but defendant Nos.1 and 2 refused to repay the money. He further stated that the defendant Nos.1 and 2 being the successors of the entire movable and immovable property of late Samir Kumar Yadav are liable to pay the due amount to the plaintiffs and the plaintiffs are 26 2025:JHHC:20764 entitled to get Rs.29,00,000/- from the defendant Nos.1 and 2. He exhibited the original registered deed of partnership No.513 dated 29.11.2012 bearing the signatures of plaintiff No.1, Samir Kumar Yadav and Dina Nath Roy (plaintiff no.2) as Exhibit-1 and the signatures of Rama Shankar Rai, Dina Nath Roy and Samir Kumar Yadav as Exhibits-1/1, 1/2 and 1/3 (with objection that the partnership deed is not registered under the Indian Partnership Act). He further exhibited the original receipts dated 04.01.2013, 01.02.2013 and 25.05.2013 issued by Samir Kumar Yadav as Exhibits-2, 2/1 and 2/2 (all with objection). He exhibited the original Cheque No.335640 dated 10.04.2014, Cheque No.335641 dated 21.04.2014 and Cheque No.335642 dated 05.05.2014 issued to plaintiff No.1 by Samir Kumar Yadav as Exhibits 3, 3/1 and 3/2 (all with objection). He exhibited original legal notice dated 14.10.2014 as Exhibit-4.
29. During cross-examination, PW-1 admitted that in November, 2012 Samir Kumar Yadav had come to his quarter and had induced him. He stated that he had filed the suit in the light of partnership deed which was registered in the Sub-registry Office, Chas. He admitted that the partnership deed did not bear the signatures of the defendant Nos.1 and 2 and no information was given to them before preparation of the partnership deed. He also admitted that Ram Das Singh was not a partner in the partnership deed. He stated that the defendant No.1 had knowledge about the partnership deed apart from the partners. He further admitted that it is mentioned in the first page of the partnership deed that Samir Kumar Yadav had already invested Rs.25,00,000/- in the project and each page of the partnership deed bears the signatures of PW-1, Dina Nath Roy and Samir Kumar Yadav. He also admitted that he had not issued any notice for arbitration to the defendant Nos. 1 and 2 and he has never amended the partnership deed. He also admitted that he has never given any written information to the defendant Nos.1 and 2 for making them partners in place of Samir Kumar Yadav in the firm. He further admitted that he had not issued any written notice to Samir Kumar Yadav with regard to the statements made in the affidavit from 29.11.2012 to 14.05.2014, but 27 2025:JHHC:20764 he had told him orally several times. He stated that he has not filed any civil or criminal case against Samir Kumar Yadav and Samir Kumar Yadav had accepted when he was alive that he had taken money from PW-1 and he would return the same in installments and this fact was known to the defendant No.1. He further admitted that a partnership deed was made without name of any firm. He also admitted that PW-1 and Dina Nath Roy had written to Ram Das Singh that Ram Das Singh will also be a partner, but he had not made any amendment in the partnership deed in this connection, nor Ram Das Singh was nominated as a partner in the partnership deed. He also admitted that he has not filed the statements of accounts of income and expenditure of the firm in the court as he had not received the same. He further admitted that he came to know subsequently that the deed of partnership was not registered in the Registrar of firm. He also admitted that Exhibits-1/1, 1/2, 1/3, 2/1, 2/2, 3, 3/1 and 3/2 do not bear the signatures of Defendant Nos.1 and 2.
30. PW-2 filed his examination-in-chief on affidavit stating the same facts as stated by the PW-1 in his affidavit of examination-in- chief. During his cross examination, PW-2 admitted that Defendant No.1 being the legal heir of Samir Kumar Yadav has been made a party in the suit, but no financial transaction has been made with Defendant Nos.1 and 2. He also admitted that after death of Samir Kumar Yadav the firm was not reconstituted. He further admitted that the plaintiffs have not filed any complaint before police station or other Officers with regard to misappropriation of the money from them by Samir Kumar Yadav, nor they had given any written information to the defendant No.1 in this connection during the lifetime of Samir Kumar Yadav. He has also not given any written information to the Defendant No.1 for making her a partner in the firm. He also admitted that the documents filed in court do not bear the signatures of Defendant Nos.1 and 2. He further admitted that Ram Das Singh was not a partner in the partnership deed. He has not issued any arbitration notice to the defendants before filing the suit. He also admitted that he does not know as to whether the plaintiffs 28 2025:JHHC:20764 have given any written information or not to any competent authority with regard to the forgery committed by Samir Kumar Yadav during the period from 29.11.2012 to 14.05.2014. He also admitted that PW- 2 has not registered the deed of partnership in the Registrar of Firm. He also admitted that he has not filed the statements of accounts of income and expenditure of the firm in the court.
31. PW-3 filed his examination-in-chief on affidavit stating that he knows both the parties and Samir Kumar Yadav was involved in the business of land and in this connection, he had acquaintance with Samir Kumar Yadav. He further stated that Samir Kumar Yadav had taken Rs.5,00,000/- on 10.12.2012 and Rs.3,00,000/- on 04.01.2013 in cash from the plaintiffs and had issued receipt dated 04.01.2013. He identified the original receipt dated 04.01.2013 bearing the signature of Samir Kumar Yadav and the signatures of PW-3 and Rakesh Ojha as witnesses. In the same way, Samir Kumar Yadav had taken Rs.50,000/- in cash on 25.01.2013 and Rs.5,00,000/- through cheque on 01.02.2013 from the plaintiffs and had issued receipt dated 01.02.2013. He identified the original receipt dated 01.02.2013 bearing the signature of Samir Kumar Yadav and his signature as a witness. He further stated that Samir Kumar Yadav had taken Rs.10,50,000/- in cash from 28.12.2012 to 24.05.2013 and Rs.5,00,000/- through two cheques each Rs.2,50,000/-, total Rs.15,50,000/- from the plaintiffs and had issued receipt dated 25.05.2013. He identified the original receipt dated 25.05.2013 bearing the signature of Samir Kumar Yadav and his signature as a witness. He further stated that Samir Kumar Yadav had taken a total amount of Rs.29,00,000/- between 29.11.2012 and 25.05.2013 for investment in the business of land with a promise to return the same with profit. On repeated demand by the plaintiffs, Samir Kumar Yadav had issued three cheques amounting a total sum of Rs.10,00,000/- to the plaintiffs. Samir Kumar Yadav died on 14.05.2014 but before his death he constructed a multi-storeyed building in Chira- Chas and after his death Defendant Nos.1 and 2 inherited the entire movable and immovable property of Samir Kumar 29 2025:JHHC:20764 Yadav and are enjoying the same. The plaintiffs demanded the money from the Defendant Nos.1 and 2 being the legal heirs of Samir Kumar Yadav, but they refused to repay the amount. He further stated that the defendant Nos.1 and 2 being the successors of the entire movable and immovable property of late Samir Kumar Yadav are liable to pay the due amount to the plaintiffs and the plaintiffs are entitled to get Rs.29,00,000/- from the defendant Nos.1 and 2. He exhibited the signatures of Samir Kumar Yadav, PW-3 (himself) and Rakesh Ojha on Exhibit-2 as Exhibits- 2/3, 2/4 and 2/5. He also exhibited the signatures of Samir Kuma Yadav and PW-3 (himself) on Exhibit 2/1 as Exhibits 2/6 and 2/7. He further exhibited the signatures of Samir Kumar Yadav and PW-3 (himself) on Exhbit-2/2 as Exhibits-2/8 and 2/9. All the exhibits were marked with objection.
32. During cross-examination, PW-3 admitted that he knows the plaintiffs and further admitted that the transaction of money as stated in paragraph 3 of his affidavit had taken place between the plaintiffs and defendants in his presence. Samir Kumar Yadav was engaged in the business of land in Bokaro and he used to supply bricks and sand to him. He further admitted that he has no knowledge about the partnership firm and who were the partners in the firm and also which partner had invested how much money. He does not know the Defendant Nos.1 and 2. He subsequently came to know that Samir Kumar Yadav and the plaintiffs were the partners in the partnership deed. He had no knowledge that Samir Kumar Yadav had invested Rs.25,00,000/- in the partnership firm and whether the partnership firm was registered in the Registrar of Firm, Ranchi or not.
33. The plaintiffs exhibited the following documents to prove their case:
Exhibit-1 (With Objection) Original Deed of Partnership No.8456/513 dated 29.11.2012 Exhibit-1/1 (With Objection) Signature of Plaintiff No.1 on Exhibit-1 Exhibit-1/2 (With Objection) Signature of Plaintiff No.2 on Exhibit-1 Exhibit-1/3 (With Objection) Signature of Samir Kumar Yadav on Exhibit-1 Exhibit-2 (With Objection) Money Receipt dated 04.01.2013 30 2025:JHHC:20764 Exhibit-2/1 (With Objection) Money Receipt dated 01.02.2013 Exhibit-2/2 (With Objection) Money Receipt dated 25.05.2013 Exhibit-2/3 (With Objection) Signature of Samir Kumar Yadav on Money Receipt dated 04.01.2013 Exhibit-2/4 (With Objection) Signature of Arvind Kumar Pandey on Money Receipt dated 04.01.2013 Exhibit-2/5 (With Objection) Signature of Rakesh Ojha on Money Receipt dated 04.01.2013 Exhibit-2/6 (With Objection) Signature of Samir Kumar Yadav on Money Receipt dated 01.02.2013 Exhibit-2/7 (With Objection) Signature of Arvind Kumar Pandey on Money Receipt dated 01.02.2013 Exhibit-2/8 (With Objection) Signature of Samir Kumar Yadav on Money Receipt dated 25.05.2013 Exhibit-2/9 (With Objection) Signature of Arvind Kumar Pandey on Money Receipt dated 25.05.2013 Exhibit-3 (With Objection) Cheque of IndusInd Bank vide Cheque No.335640 of Rs.3,00,000/-
Exhibit-3/1 (With Objection) Cheque of IndusInd Bank vide Cheque No.335641 of Rs.2,00,000/-
Exhibit-3/2 (With Objection) Cheque of IndusInd Bank vide Cheque No.335642 of Rs.5,00,000/-
Exhibit4 (Without Objection) Legal Notice dated 14.10.2014
34. The Defendant Nos.1 and 2, after filing written statement, did not adduce any evidence to rebut the evidence of the plaintiffs even after providing many opportunities to them by the learned trial court and no one appeared on behalf of them.
35. The Proforma Defendant No.3 (Ram Das Singh) examined himself as a defendant witness. He filed his examination-in-chief on affidavit stating that he is fully acquainted with the facts of the suit. He further stated that Samir Kumar Yadav had come to his house in the year 2013 and had requested for providing loan. Samir Kumar Yadav had told him that he is going to start a big project of land at Mouza-Bhawanipur (Solagidih) and he has already taken Rs.16,00,000/- from the plaintiffs and he has himself invested Rs.25,00,000/- in the business of land. Believing the statements of Samir Kumar Yadav and Rama Shankar Rai, he agreed to help Samir Kumar Yadav. Thereafter, at the instance of Samir Kumar Yadav he filed an application for increasing the credit limit of his account in Allahabad Bank from Rs.20,00,000/- to Rs.30,00,000/- in which Samir Kumar Yadav became a guarantor and Ram Das Singh 31 2025:JHHC:20764 deposited title deed of landed property measuring 06 decimals bearing Plot No.1606 (Navin Co-operative Plot No.173), Khata No.01, which was purchased through Registered Sale Deed No.385 dated 21.01.2006, in the name of Samir Kumar Yadav as collateral security and accordingly his credit limit was increased from Rs.20,00,000/- to Rs.30,00,000/-. Thereafter, the proforma defendant (Ram Das Singh) paid altogether Rs.13,00,000/- to Samir Kumar Yadav vide Cheque No.049130 dated 04.01.2013 for Rs.3,00,000/-, Cheque No.049147 dated 01.02.2013 for Rs.5,00,000/-, Cheque No.341403 dated 15.03.2013 for Rs.2,50,000/- and Cheque No.341402 dated 16.03.2013 for Rs.2,50,000/- of Allahabad Bank for business purpose. Thereafter at the instance of Samir Kumar Yadav, the plaintiffs issued a receipt dated 02.02.2013 for Rs.8,00,000/- in which Samir Kumar Yadav was a witness. After some months, when he demanded to return the money, Samir Kumar Yadav deferred to repay on one or the other pretext. He further stated that when he enquired about the status of the land of Bhawanipur mouza, he came to know that Samir Kumar Yadav had no title over the land and he had also not started any work. Due to not returning of money, his interest on the loan amount reached to Rs.5,00,000/- and the bank threatened him to declare his account as N.P.A. This witness further stated that Samir Kumar Yadav died on 14.05.2014 but before his death Samir Kumar Yadav had constructed a multi-storeyed building at Chira Chas. After death of Samir Kumar Yadav, Defendant Nos.1 and 2 inherited the entire movable and immovable properties and they are enjoying the same. He further stated that the defendant Nos.1 and 2 being the successors of the entire movable and immovable properties of late Samir Kumar Yadav are liable to pay Rs.13,00,000/- and the interest amount of Rs.5,00,000/- to him and he is entitled to get a total amount of Rs.18,00,000/- from the defendant Nos.1 and 2.
36. The Proforma Defendant No.3 exhibited the following documents: -
Exhibit-A (without objection) Original Money Receipt dated 02.02.2013 32 2025:JHHC:20764 Exhibit-A/1 (without objection) Signature of Plaintiff No.1 on Exhibit-A Exhibit-A/2 (without objection) Signature of Plaintiff No.2 on Exhibit-A Exhibit-A/3 (without objection) Signature of Samir Kumar Yadav on Exhibit-A Exhibit-A/4 (without objection) Signature of Arvind Kumar Pandey on Exhibit-A Exhibit-B (without objection) Original attested copy of Statement of Account from 01.01.2013 to 19.09.2016 of A/C No.20982246324, Allahabad Bank, B.S. City
37. During his cross-examination on behalf of the plaintiffs, proforma defendant admitted that Samir Kumar Yadav had also taken Rs.16,00,000/- from the plaintiffs apart from him and Samir Kumar Yadav had also not returned the money of the plaintiffs. He further admitted that at the instance of Samir Kumar Yadav cash credit limit of his account was increased from Rs.20,00,000/- to Rs.30,00,000/- and Samir Kumar Yadav had taken loan from him, but due to non- return of the loan of Rs.13,00,000/- by Samir Kumar Yadav, he could not repay the loan amount to the bank and in the year 2016 bank recovered money from his fixed deposit and his limit in cash credit account in the bank was reduced to Rs. 15 lakhs. No one appeared on behalf of the Defendant Nos.1 and 2 to cross examine proforma defendant and therefore, he was discharged by the trial court. Point of Determination No. (i)
38. The two plaintiffs and Samir Kumar Yadav executed a registered deed of partnership which was registered before Sub- Registrar, Chas, Bokaro on 29.11.2012 but not registered with registrar of firms under the Indian Partnership Act, 1932. Samir Kumar Yadav expired on 14.05.2014 and the suit was filed on 15.12.2014 for recovery of Rs. 29 lakhs from the wife and daughter of 33 2025:JHHC:20764 Samir Kumar Yadav who were made defendant nos. 1 and 2 respectively stating that the plaintiffs had paid Rs. 16 lakhs in cash to Samir Kumar Yadav and the plaintiffs had paid further amount of Rs. 13 lakhs to Samir Kumar Yadav by taking the same from proforma defendant no.3 for the partnership business. It was asserted that initially the plaintiffs paid Rs. 5 lakhs to Samir Kumar Yadav, but on account of financial crunch they approached the proforma defendant and proforma defendant no.3 had given the following cheques:
Cheque Number and date Amount
Cheque No.49130 dated Rs.3,00,000/-
04.01.2013
Cheque No.49147 dated Rs.5,00,000/-
01.02.2013
Cheque No.341403 dated Rs.2,50,000/-
15.03.2013
Cheque No.341402 dated Rs.2,50,000/-
16.03.2013
Total Rs. 13,00,000/-
All the aforesaid cheques were of Allahabad Bank, Sector -IV Branch and all the aforesaid cheques were issued in the name of Samir Kumar Yadav by the proforma defendant. In receipt of some of the aforesaid cheques the plaintiffs had issued a money receipt dated 02.02.2013 in favour of the proforma defendant and it was stated that in the money receipt Samir Kumar Yadav was a witness. The money receipt dated 02.02.2013 has been exhibited as exhibit-A.
39. Upon perusal of the money receipt dated 02.02.2013 (exhibit- A), it is apparent that the plaintiffs had issued the money receipt for a total amount of Rs. 8 lakhs and the money receipt was issued in favour of the proforma defendant in which the following cheques have been mentioned: -
(i) Cheque No.49130 dated 04.01.2013 for an amount of Rs. 3 lakhs, 34 2025:JHHC:20764
(ii) Cheque No.49147 dated 01.02.2013 for an amount of Rs. 5 lakhs.
40. It was also stated in the money receipt dated 02.02.2013 (exhibit-A) that the aforesaid cheques amounting to total of Rs. 8 lakhs have already been received by the plaintiffs from the account of the proforma defendant no.3 in the name of R.D. Singh Contractor bearing account no. 20982246324. It further appears from the money receipt dated 02.02.2013 (exhibit-A) that the plaintiffs also mentioned therein that they had made the proforma defendant no.3 as partner in the partnership to the extent of the share of the plaintiffs in the partnership. The money receipt dated 02.02.2013 (exhibit-A), refers to two witnesses;
(i) Samir Kumar Yadav (died prior to filing of the suit), and
(ii) A.K. Pandey, who was examined as P.W. 3 (Arvind Kumar Pandey).
41. The statement of account of Allahabad Bank bearing no. 20982246324 has been exhibited as exhibit-B by the proforma defendant no. 3. The plaintiffs produced three money receipts, exhibit 2,2/1 and 2/2, issued by Samir Kumar Yadav (deceased partner). The plaint as well as exhibits 2, 2/1, 2/2, A and B (statement of accounts) reveal as follows:
Cheque Number Amount
Cheque No.49130 Rs.3,00,000/- Mentioned in the
Dated 04.01.2013 plaint and exhibit- 2
and also in exhibit-A
Cheque No.49147 Rs.5,00,000/- Mentioned in the
Dated 01.02.2013 plaint and exhibit- 2/1
and also in exhibit-A
Cheque No.341402 Rs.2,50,000/- as Mentioned in the
Dated 16.03.2013 per plaint and plaint and exhibit- 2/2
exhibit- 2/2 but for Rs.2.5 lakhs but
was only for amount does not
Rs.36,000/- in the match with the
35
2025:JHHC:20764
statement of statement of account
account (exhibit - (exhibit -B).
B)
Cheque No.341403 Rs.2,50,000/- as Mentioned in the
Dated 15.03.2013 per plaint and plaint and exhibit- 2/2
exhibit- 2/2 for Rs.2.5 lakhs but
name of bearer of the
cheque does not reflect
in the statement of
account (exhibit -B).
42. Thus, the claim relatable to proforma defendant no.3 does not match completely from the statement of account (exhibit-B).
43. Further, it is the case of the plaintiffs and also the proforma defendant no.3 that all the alleged cheques were issued by the proforma defendant no.3 directly in the name of Samir Kumar Yadav. However, it is their specific case that the money was paid to Samir Kumar Yadav for the partnership business.
44. So far as defendant no. 3 is concerned, he has deposed before the court that when Samir Kumar Yadav and Rama Shankar Rai informed the proforma defendant no.3 about their financial crisis, he told them that he had a cash credit limit of Rs. 20 lakhs with Allahabad Bank and then at the instance of Samir Kumar Yadav, proforma defendant no.3 increased the cash credit limit to Rs. 30 lakhs and Samir Kumar Yadav also became a guarantor and mortgaged his property with Allahabad Bank relating to registered sale-deed no. 385 dated 21.01.2006 in the cash credit account of the proforma defendant no. 3. The defendant no. 3 has further deposed that after increase of the cash credit limit he issued the aforesaid cheques total for an amount of Rs. 13 lakhs from the said cash credit account and he exhibited the statement of account from 01.01.2013 to 19.09.2016 (exhibit-B). He has further stated that at the instance of Samir Kumar Yadav, the plaintiffs issued money receipt dated 36 2025:JHHC:20764 02.02.2013 (exhibit-A) for an amount of Rs. 8 lakhs. Proforma defendant no.3 also deposed that after payment of the amount to Samir Kumar Yadav, defendant no. 3 had asked him to return the money. Subsequently, the cash credit account of the defendant no. 3 was carrying interest of Rs. 5 lakhs and the bank was threatening the defendant no. 3 that his cash credit account would be declared Non- Performing Asset (NPA). He has further deposed that on 14.05.2014, Samir Kumar Yadav died and had built a multi-storeyed building and the defendant nos. 1 and 2 inherited the entire property of Samir Kumar Yadav. He has stated in his evidence that since Samir Kumar Yadav had taken money from him, therefore, his legal heirs and successors are supposed to return the money to the extent of Rs. 13 lakhs and also interest which the bank had charged to the extent of Rs. 5 lakhs and claimed that defendant nos. 1 and 2 are supposed to return the amount of Rs. 18 lakhs to defendant no. 3.
45. During his cross-examination, defendant no. 3 has stated that Samir Kumar Yadav had taken Rs. 16 lakhs from the plaintiffs in the name of Solagidih project and Samir Kumar Yadav had not returned the amount to the plaintiffs. He has further stated in his cross- examination that he had enhanced the cash credit limit in his account in Allahabad Bank from Rs. 20 lakhs to Rs. 30 lakhs at the instance of Samir Kumar Yadav and Samir Kumar Yadav had taken loan from the plaintiffs and on account of non-refund of Rs. 13 lakhs, he was not able to clear the dues of the bank. He also stated that in the year 2016 the bank adjusted his Fixed Deposit in the cash credit account and reduced the credit limit to Rs. 15 lakhs.
46. The perusal of the evidence of proforma defendant no. 3 clearly reveals that there was a direct dealing between Samir Kumar Yadav and proforma defendant no. 3. Proforma defendant no.3 had enhanced the cash credit limit in his bank account from Rs. 20 lakhs to Rs. 30 lakhs and had thereafter issued the cheques and ultimately his cash credit account was overdrawn and the fixed deposit was adjusted. Further, Samir Kumar Yadav had mortgaged his personal landed 37 2025:JHHC:20764 property in the cash credit account of proforma defendant no.3 and had also become a guarantor in the Cash Credit Account for the purpose of enhancement of limit. The Proforma Defendant no.3 was seeking to recover the money paid to Samir Kumar Yadav from his Cash credit account in which Samir Kumar Yadav was a guarantor and mortgagor.
47. The proforma defendant no.3 in his evidence-in-chief has stated that Samir Kumar Yadav had approached him in the year 2013 and stated that he was in need of money and requested the defendant no. 3 to give him money by way of loan. He has stated that Samir Kumar Yadav had come to him along with the plaintiffs. He has further stated that Samir Kumar Yadav and the plaintiffs told him that they are going to enter into a big project in relation to the land in which it is likely to have huge profit and for that purpose, Samir Kumar Yadav had also taken Rs. 16 lakhs from the plaintiffs and had invested his 25 lakhs in business, but more money was required. Defendant no. 3 further stated that Samir Kumar Yadav assured him that the amount given by him by way of loan will remain secured and defendant no. 3 would get back the amount. His further evidence is that he was swayed away and trusted Samir Kumar Yadav and the plaintiff no.1 and agreed to help Samir Kumar Yadav; when he told Samir Kumar Yadav that there is no much amount in his bank account but has a cash credit limit of Rs. 20 lakhs in Allahabad Bank which he has already utilized for the purpose of his business, then Samir Kumar Yadav induced him to increase the limit of cash credit account in which Samir Kumar Yadav would become the guarantor by mortgaging his landed property; consequently, the defendant no. 3, after being swayed away by the assurance and plan of Samir Kumar Yadav, applied for enhancement of cash credit limit from Rs. 20 lakhs to Rs. 30 lakhs and ultimately the account of the defendant no.3 became overdrawn and it was to become a Non-Performing Asset of the bank.
382025:JHHC:20764
48. So far as exhibit-A dated 02.02.2013 is concerned, the same is issued in favour of the proforma defendant no.3 by the plaintiffs in which Samir Kumar Yadav and A.K. Pandey (P.W-3) are witness and as per exhibit-A the plaintiffs claimed to have received amount of Rs. 8 lakhs through two cheques, but the statement of account and also the evidence of proforma defendant no. 3 (D.W-1) reveals that the amount was directly received by Samir Kumar Yadav and not by or through the plaintiffs. The exhibit- A further reveals that the plaintiffs agreed that in lieu of the aforesaid amount of Rs. 8 lakhs, the plaintiffs made the proforma defendant no.3 as partner in the partnership but this is not supported by the oral evidence of proforma defendant no. 3 or even by the evidence of A.K. Pandey (P.W-3). It has come in the evidence of P.W-1 that the plaintiffs had written to Proforma defendant no.3 that he will also be a partner, but had not made any amendment in the partnership deed nor defendant no. 3 was nominated as a partner in the partnership firm. P.W-1 also admitted that he has not filed the statements of accounts of income and expenditure of the firm in the court as he had not received the same. P.W-1 further admitted that he came to know subsequently that the deed of partnership was not registered in the Registrar of firm.
49. The case of the plaintiffs is that they borrowed money from the proforma defendant no.3 to give the money to Samir Kumar Yadav. The perusal of the evidence of defendant no. 3 reveals that he had agreed to lend the amount to Samir Kumar Yadav and it was Samir Kumar Yadav who had promised to return the amount to the defendant no.3 . There is no mention that the cheques were handed over to the plaintiffs and the plaintiffs had handed over the cheques to Samir Kumar Yadav either on their behalf or on behalf of the defendant no. 3. The evidence of the defendant no. 3 reveals that there was a direct dealing between Samir Kumar Yadav and the defendant no. 3 but the defendant no. 3 is not the plaintiff before this Court.
50. It is also important to note that Samir Kumar Yadav had mortgaged his landed property to the bank and became a guarantor for 39 2025:JHHC:20764 enhancement of the cash credit amount of the proforma defendant no.3. The cash credit account was for the business of the proforma defendant no.3 and not for the partnership firm or to lend money to the plaintiffs and the cash credit account was on the verge of turning NPA in which the proforma defendant no.3 served the interest through his fixed deposit. The plaintiffs as well as the proforma defendant no.3 alleged that the amount taken by Samir Kumar Yadav from the cash credit account of the proforma defendant no.3 was put to personal use by Samir Kumar Yadav and not utilised for partnership business and therefore the partnership business never started. The proforma defendant no.3 did not join as co-plaintiff in the case and the plaintiffs made out a case that they had taken money from proforma defendant no.3 to give to Samir Kumar Yadav for the partnership business.
51. The proforma defendant no.3 also stated that he would file counter claim against the defendant no. 1 and 2 and also the plaintiffs for realization of the amount but no such counter claim was filed.
52. The proforma defendant no.3 deposed that on 14.05.2014, Samir Kumar Yadav died and had built a multistoried building and that the defendant nos. 1 and 2 inherited the entire property of Samir Kumar Yadav, therefore, his legal heirs and successors are supposed to return the money to the extent of Rs. 13 lakhs and also interest which the bank had charged to the extent of Rs. 5 lakhs and claimed that defendant nos. 1 and 2 are supposed to return the amount of Rs. 18 lakhs to defendant no. 3.
53. In view of the aforesaid findings and discussions, this court is of the considered view that the plaintiffs have failed to prove that the defendant no 3 had paid the amount to Samir Kumar Yadav on behalf of the plaintiffs so as to maintain the suit for recovery of money amounting to Rs.13 lakhs by the plaintiffs alleged to have been paid by the defendant no.3 to Samir Kumar Yadav.
402025:JHHC:20764
54. This Court finds that the learned trial court, while considering the statement of account of the cash credit account of the defendant no. 3 (exhibit-B) has also failed to consider that cheque no. 341402 dated 16.03.2013 was for an amount of Rs. 36,000/- only and not for Rs. 2,50,000/- and therefore, aggregate of the four cheques of defendant no. 3 did not match with his claim of Rs.13 lakhs, the detailed discussion in this connection has already been made above.
55. Further, the learned trial court while decreeing the amount of Rs. 13 lakhs with respect to defendant no. 3 has recorded that the defendant no. 3 was paying interest on the loan amount of Rs. 13 lakhs which was given to Samir Kumar Yadav on the undertaking/guarantee given by the plaintiffs. In fact, the defendant no. 3 had paid interest to the bank with respect to his own cash credit account which as per his own case, was for his own business in which Samir Kumar Yadav had mortgaged his sale-deed of land and had also become a guarantor.
56. The Court decreed the amount of Rs. 13 lakhs to the plaintiffs inclusive of the amount paid by defendant no. 3 to Samir Kumar Yadav merely by observing that the payment was made to Samir Kumar Yadav by the defendant no. 3 on undertaking/guarantee given by the plaintiffs. This was never the case of the plaintiffs. Rather, the plaintiffs pleaded that the plaintiffs sought financial help from defendant no. 3 to give money to Samir Kumar Yadav for partnership business and therefore, they filed the suit for recovery of the entire amount [cash amount paid by the plaintiffs to Samir Kumar Yadav to the extent of Rs. 16 lakhs and paid by defendant no. 3 to the extent of Rs. 13 lakhs, total being Rs. 29 lakhs]. The learned trial court has not considered the materials on record properly to come to its findings. As per the evidence of proforma defendant no.3, he had given the amount to Samir Kumar Yadav as loan which Samir Kumar Yadav had promised to refund. As held above, the evidence of the defendant no. 3 reveals that there was a direct dealing between Samir Kumar Yadav and the defendant no.3 and the plaintiffs have failed to prove that the 41 2025:JHHC:20764 defendant no 3 had paid the amount to Samir Kumar Yadav on behalf of the plaintiffs so as to maintain the suit by the plaintiffs for recovery of money from the legal heirs and successors of Samir Kumar Yadav paid by proforma defendant no.3 directly to Samir Kumar Yadav.
57. In view of the aforesaid findings, no decree could have been passed by the learned trial court in favour of the plaintiffs for recovery of any amount relatable to the defendant no.3.
58. The point of determination no.(i) is accordingly decided in favour of the appellants (defendant no.1 and 2) and against the respondents.
Point of Determination No. (ii)
59. The arbitration clause in the present case is referrable to a clause in original deed of partnership No.8456/513 dated 29.11.2012 (exhibit-1 marked with objection) and admittedly this deed of partnership though registered under the Registration Act, 1908, is not registered under the Act of 1932. The defendant nos. 1 and 2, inter alia, raised objection in connection with non-registration of the partnership deed under section 59 of the Act of 1932 and also referred to Clause in the partnership deed with respect to arbitration. Admittedly, at any point of time no petition was filed under section 8(1) of Act of 1996 to object to the jurisdiction of the court to try the suit and to refer the matter for arbitration.
60. The learned trial court decided this point under issue no. 4 vide paragraph 11 of the impugned judgment and observed that section 8 of the Arbitration and Conciliation Act, 1996 stipulates that if there is an arbitration clause in the agreement and any matter, which is the subject of an arbitration agreement is brought before the judicial authority, a party to the arbitration agreement or any person claiming through or under him, if applies not later than the date of his first statement on the substance of dispute, the court may refer the parties to arbitration unless it finds that prima facie, no valid arbitration agreement exists. The learned court recorded that in the instant case no petition was filed by defendant nos. 1 and 2 to refer the matter for 42 2025:JHHC:20764 arbitration by invoking arbitration clause and consequently, the submission of defendant nos. 1 and 2 that the suit was barred by section 5 of the Arbitration and Conciliation Act, 1996 was rejected and the issue no. 4 relatable to the point of determination no. (ii) was decided in favour of the plaintiffs and against defendant nos. 1 and 2.
61. The findings of the learned trial court are sought to be supported by the learned counsel for the respondents by referring to the judgment passed by the Hon'ble Bombay High Court in "Garden Finance Ltd. v. Prakash Inds. Ltd. & Anr." reported in AIR 2002 BOM 8, wherein a reference has been made to the judgment passed by the Hon'ble Supreme Court in the case of "P. Anand Gajapathi Raju Vs. P.V.G. Raju (dead)" reported in (2000) 4 SCC 539 wherein the requirements that have to be satisfied before the Court in terms of section 8 have been laid down. In the said judgment of the Hon'ble Supreme Court, it has been held that the conditions which are required to be satisfied under sub-section (1) and (2) of section 8 of the Arbitration Act before the court can exercise its powers are:
(i) There is an arbitration agreement.
(ii) A party to the agreement brings an action in the Court against
the other party.
(iii) Subject-matter of the action is the same as the subject-matter of the arbitration agreement.
(iv) The other party moves the court for referring the parties to arbitration before it submits his first statement on the substance of the dispute.
After referring to the aforesaid judgment of the Hon'ble Supreme Court, the Hon'ble Bombay High Court ultimately held that in absence of an application under section 8 for referring the dispute to arbitration, provisions of section 5 of the Arbitration and Conciliation Act, 1996 do not come into play and do not operate. The Hon'ble Bombay High Court held as under:
"9.... In order to afford the plaintiff a complete opportunity of being heard on an application under S. 8 of the Arbitration Act, in my opinion, it would have to be held that the party which seeks to refer the dispute to the Arbitrator 43 2025:JHHC:20764 has to make a written application for that purpose, so that the Plaintiff, who has instituted the suit, knows exactly the grounds on which the reference is sought. In the present case, though the Defendant has been served with this suit long back, there is no written application made....
...Thus, there is no application made under Section 8 for referring the dispute to the arbitration and therefore as there is no application made for referring the dispute to the arbitration, provisions of Section 5 do not come into play and do not operate..."
62. Similarly, reliance has been placed by the learned counsel for the respondents upon the judgment passed by the High Court of Karnataka in "Y. Harish & Anr. V. Y. Satish & Ors." [W.P. No. 10716 of 2022 (GM-CPC)], wherein it has been held as follows:
"11. The language of Section 8 before and after the amendment is explicit and clear. It requires a formal, independent and specific application before and or at the time of filing of written statement seeking reference to arbitration. The judgment cited by the learned counsel for the respondent No. 1/plaintiff rendered by the Co-ordinate Bench of this Court in the case of P. Tarachand vs. Seshamal M. Jain (supra) is squarely applicable is the present case in hand. This Court in the above said judgment has held that the proceedings pertaining to domestic arbitration, the only provision that purports to oust the jurisdiction of the Civil Court is Section 8 of the Act of 1996. The Coordinate Bench of this Court was of the view that provisions of the Act of 1996 clearly indicates that apart from Section 8, there is no provision under the Act of 1996 that ousts the jurisdiction of the Civil Court. Even Section 8 contemplates that the matter is referred to arbitration by the Civil Court only subject to party invoking and complying with mandatory requirements of Section 3 within the lime stipulated therein.
12. In the light of the principles laid down by the Co- ordinate Bench of this Court and also the judgment cited supra, in the present case on hand, petitioners have not at all invoked Section 8 of the Act of 1996. On the contrary, the present petitioners have filed application under Order 7 Rule 11(d) of CPC seeking rejection of plaint on the ground that it is barred by law. Even till today, the present petitioners have not taken recourse to the provisions of Section 8 of the Act of 1996."44
2025:JHHC:20764
63. This Court fully agrees with the view expressed in the aforesaid two judgments passed by the Hon'ble Bombay High Court and High Court of Kartanaka that the ouster of jurisdiction of civil court, on the ground of existence of arbitration clause, can be urged by filing an application under section 8 of Arbitration and Conciliation Act, 1996 which has to be filed prior to filing the written statement on merits, failing which section 5 of the Arbitration and Conciliation Act, 1996 does not come into operation.
64. This court is of the view that learned trial court has rightly decided the issue no. 4 which is corresponding to the point of determination no. (ii) and held that the suit was not barred by section 5 of the Arbitration and Conciliation Act, 1996. The point of determination no. (ii) is accordingly decided in favour of the respondents and against the appellants.
Point of determination no. (iii)
65. Before proceeding to decide this point, it would be relevant to deal with the law settled with respect to nature of pleading and proof when an allegation of fraud is made. The pleadings are required to be specific with particulars of allegation of fraud and it is to be proved beyond all reasonable doubts and the evidence cannot travel beyond the pleadings with respect to allegations of fraud. It is also settled law that the allegations of fraud through clever drafting when made to circumvent the legal bar to institute a suit cannot be sustained in the eyes of law.
66. In the judgment reported in (1994) 1 SCC 502 (supra), it has been held in paragraph 41 that mere pleadings do not make a strong case of prima facie fraud. The material and evidence have to show it. A reference has been made to a previous judgment of Privy Council wherein it was held that fraud like any other charge of a criminal offence whether made in civil or criminal proceedings, must be established beyond reasonable doubt. A finding as to fraud cannot be based on suspicion and conjecture. Paragraph 41 and 42 of the judgment reported in (1994) 1 SCC 502 (Supra) are quoted as under: -
452025:JHHC:20764 "41. Again it appears that the High Court found a strong prima facie case against defendant 4 merely on reading the plaint. Pleadings make only allegations or averments of facts. Mere pleadings do not make a strong case of prima facie fraud. The material and evidence has to show it. No material whatsoever is referred to by the High Court.
42. In A.L.N. Narayanan Chettyar v. Official Assignee, High Court Rangoon the Privy Council held that:
"Fraud like any other charge of a criminal offence whether made in civil or criminal proceedings, must be established beyond reasonable doubt. A finding as to fraud cannot be based on suspicion and conjecture."
67. In the judgment passed by the Hon'ble Supreme Court reported in (2022) 2 SCC 573 (Supra), it has been observed through paragraph 8 and 9 that in case of fraud, the pleading must set forth full particulars and the case can only be decided on the particulars as laid and there can be no departure from them in evidence. It has been held that general allegations are insufficient. It has been observed that even as per Order VI Rule 4 of CPC in all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, willful trust or undue influence, particulars shall be stated in the pleading and that when the suit is barred by any law, the plaintiff cannot be allowed to circumvent that provision by means of clever drafting so as to avoid mention of those circumstances by which the suit is barred by law of limitation. In the aforesaid judgment passed by the Hon'ble Supreme Court, it was held that the allegation of fraud was made without any particulars only with a view to get out of the bar under Section 34 of the SARFAESI Act and by clever drafting, the plaintiff of the said case intended to bring the suit maintainable. The paragraph relevant for the purposes of this case are quoted as under: -
"8. In Bishundeo Narain in para 22, it is observed and held as under :
"22. ... Now if there is one rule which is better established than any other, it is that in cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid.46
2025:JHHC:20764 There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any court ought to take notice however strong the language in which they are couched may be, and the same applies to undue influence and coercion. See Order 6 Rule 4, Civil Procedure Code."
8.1. Similar view has been expressed in Ladli Parshad Jaiswal and after considering the decision of the Privy Council in Bharat Dharma Syndicate Ltd. v. Harish Chandra, it is held that a litigant who prefers allegation of fraud or other improper conduct must place on record precise and specific details of these charges. Even as per Order VI Rule 4 in all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, particulars shall be stated in the pleading. Similarly in K.C. Sharma & Co. [Union of India v. K.C. Sharma & Co., (2020) 15 SCC 209] it is held that "fraud" has to be pleaded with necessary particulars. In Ram Singh [Ram Singh v. Gram Panchayat Mehal Kalan, (1986) 4 SCC 364], it is observed and held by this Court that when the suit is barred by any law, the plaintiff cannot be allowed to circumvent that provision by means of clever drafting so as to avoid mention of those circumstances by which the suit is barred by law of limitation.
8.2. ..............................."
68. In the judgment passed by the Hon'ble Supreme Court reported in (2024) 8 SCC 700 (Annapurna B. Uppin & Others vs. Malsiddappa & Anr.), it has been observed in paragraph 16 that the law is well-settled that legal heirs of a deceased partner do not become liable for any liability of the firm upon the death of the partner. Paragraph 16 of the aforesaid judgment is quoted as under: -
"16. Thirdly, there was no evidence on record to show that a fresh partnership deed was executed reconstituting the firm in which the present appellants had become partners so as to take upon themselves the assets and liabilities of the firm. The law is well settled that legal heirs of a deceased partner do not become liable for any liability of the firm upon the death of the partner."
69. In the judgment passed by the Hon'ble Supreme Court reported in (2025) SCC OnLine SC 125 (Sunkari Tirumala Rao & Others vs. 47 2025:JHHC:20764 Penki Aruna Kumari), it has been held that Section 69(1) prohibits a suit amongst the partners of an unregistered partnership firm, for the enforcement of a right either arising from a contract or conferred by the Act, unless the suit amongst the partners is in the nature of dissolution of the partnership firm and/or rendition of accounts. It has also been held in the same judgement that Section 69(2) prohibits the institution of a suit by an unregistered firm against third persons for the enforcement of a right arising from a contract. It has been further held that the nature of bar under Section 69 of the Indian Partnership Act, 1932 is of a mandatory character and there could be exemption from application of section 69 when the suit is for enforcement of statutory right conferred under any other law or a common law right. It has also been held that the defence that the partnership business had not yet commenced cannot be a reason to overcome the jurisdictional bar under Section 69(1) of the Partnership Act, 1932. In the said case, the partnership deed revealed that a sum of Rs. 30,00,000/- was given to the respondent which was then sought to be recovered and a suit for recovery was filed by a set of partners together on one side against another partner for the purpose of enforcing a right accruing under the partnership agreement and the suit was held to be barred under section
69. It has been held that a suit for dissolution of the partnership firm and rendition of accounts, especially considering that the factum of non- registration of the partnership firm would not have acted as bar in a suit for dissolution in light of the exception carved out under Section 69(3).
70. Paragraph 8 and 14 to 16 of the aforesaid judgment reported in 2025 SCC OnLine SC 125 (supra) are quoted as under: -
"8. It is evident from a reading of sub-sections (1) and (2) of Section 69 that it assumes a mandatory character.
Section 69(1) prohibits a suit amongst the partners of an unregistered partnership firm, for the enforcement of a right either arising from a contract or conferred by the Act, unless the suit amongst the partners is in the nature of dissolution of the partnership firm and/or rendition of accounts. Section 69(2) prohibits the institution of a suit by an unregistered firm against third persons for the enforcement of a right arising from a contract. As a consequence, a suit filed by an unregistered partnership 48 2025:JHHC:20764 firm and all proceedings arising thereunder, which fall within the ambit of Section 69 would be without jurisdiction.
"14. A perusal of the partnership deed clearly reveals that the sum of Rs. 30,00,000/- which was given to the respondent and which is now sought to be recovered, was rendered by the petitioners as capital for the purpose of acquiring 75% shares collectively in the partnership firm. As per the arrangement, the respondent was to hold the remaining 25% shares. Therefore, there is no doubt that the suit for recovery was filed by a set of partners together on one side, against another partner, for the purpose of enforcing a right accruing under the agreement.
15. It is a clear as a noon day that the present suit had not been instituted by or on behalf of the firm against any third persons so as to fall under the ambit of Section 69(2). The petitioners have also not filed the instant suit for enforcing any statutory right conferred under any other law or a common law right so as to exempt the application of Section 69. Hence, the rigours of Section 69(1) would apply on such a suit and the partnership firm being unregistered would prevent the petitioners from filing a bare suit for recovery of money from the respondent.
16. It would have instead been appropriate for the petitioner to have preferred a suit for dissolution of the partnership firm and rendition of accounts, especially considering that the factum of non-registration of the partnership firm would not have acted as bar in a suit for dissolution in light of the exception carved out under Section 69(3). The defence that the partnership business had not yet commenced and thus, such a suit for dissolution could not have been preferred, would not be of any avail to the petitioners, particularly for overcoming the jurisdictional bar under Section 69(1). The High Court is right in taking the view that a suit of such nature could not be said to be maintainable in the absence of the registration of the partnership firm."
71. Now coming to the facts of this case, admittedly , Samir Kumar Yadav (since deceased) [husband of Defendant No.1 and father of Defendant No.2] executed a deed of partnership with the plaintiffs on 29.11.2012 registered under registration act but was not registered under the Act of 1932. It is the case of the plaintiffs that 49 2025:JHHC:20764 prior to execution of the Partnership Deed, Samir Kumar Yadav had induced the plaintiffs to enter into a partnership for land development business for one of the projects at Mouza- Bhawanipur @ Solagidih and told the plaintiffs that he had already invested Rs.25,00,000/- in the project and for further investment, plaintiffs would be added as partners in the project and would get immense profit. Thereafter, Samir Kumar Yadav showed about 40 acres of vast tract of land bearing Plot No.1327, Khata No.96 and other plots of the same khata of Mouza Bhawanipur @ Solagidih and projected very rosy picture regarding the land development business and upon his insistence, the plaintiffs paid Rs.29,00,000/- only to Samir Kumar Yadav on different dates for land development business. There is no pleading as to when Samir Kumar Yadav showed about 40 acres of vast tract of land bearing Plot No.1327, Khata No.96 and other plots of the same khata of Mouza Bhawanipur @ Solagidih and this assumes importance as the partnership deed dated 29.11.2012 registered under the Registration Act does not refer to the said property and it only says that Samir Kumar Yadav had invested Rs.25 Lakhs for the land development business.
72. As per the case of the plaintiffs, initially the plaintiffs paid Rs.5,00,000/- to Samir Kumar Yadav and thereafter, due to financial crunch, they approached the Proforma Defendant no.3 to provide monetary help for smooth running of the business who gave a total amount of Rs.13,00,000/- to Samir Kumar Yadav for development of the partnership business. The plaintiffs had issued a money receipt dated 02.02.2013 to the proforma defendant in which Samir Kumar Yadav was a witness. The plaintiffs had given the rest amount of Rs.11,00,000/-, totaling to Rs. 16 lakhs in cash to Samir Kumar Yadav and Samir Kumar Yadav had issued three money receipts to the plaintiffs for a total of Rs.29 lakhs.
73. It is the specific case of the plaintiffs that when the plaintiffs enquired about the status of the financial condition of the business, Samir Kumar Yadav did not give the actual status of the financial position of the partnership business and later on, they found that 50 2025:JHHC:20764 neither any land in Mauza Bhawanipur in Khata No.96 for the land development business was ever purchased by Samir Kumar Yadav nor partnership business was ever started and nothing was invested by Samir Kumar Yadav in the business and Samir Kumar Yadav had taken Rs.29,00,000/- from the plaintiffs by playing fraud upon them.
74. There is no pleading as to when the plaintiffs enquired from Samir Kumar Yadav about the progress in the business and when and how they came to know that Samir Kumar Yadav had not invested any money in the business and when and how they discovered the alleged fraud committed by Samir Kumar Yadav. It is important to note that it is not the case of the plaintiffs that Samir Kumar Yadav ever told the plaintiffs/ proforma defendant no.3 that he had purchased the aforesaid particular property in his name, rather their case is that Samir Kumar Yadav had shown the said property to them and gave a rosy picture with respect to land development business.
75. It is the case of the plaintiffs that when the plaintiffs demanded to return their amount, Samir Kumar Yadav issued three post-dated cheques in the name of plaintiff no.1 totaling 10 lakhs of April/May 2014 as contained in exhibit- 3 series and since he was suffering from some disease, he had asked the plaintiff no.1 not to present the cheques and soon thereafter died on 14.05.2014. The money is sought to be recovered from the defendant no. 1 and 2, the legal heirs and successors of Samir Kumar Yadav who are said to have inherited the properties of Samir Kumar Yadav and are enjoying and possessing the building constructed by Samir Kumar Yadav. It has been argued that it is a common law remedy to recover money, fraudulently taken by Samir Kumar Yadav, from plaintiff no. 1 and 2 and proforma defendant no.3 for the partnership business of land development and hence bar under section 69 of the Act of 1932 is not applicable. In the aforesaid background, it is crucial as to whether the case of fraud has been properly pleaded and also proved to seek exemption of bar under section 69 of the Act of 1932.
512025:JHHC:20764
76. It is important to note that in the partnership deed (exhibit-1) it has been simply mentioned that Samir Kumar Yadav had already invested an amount of Rs.25 lakhs on one of his projects at Bhawanipur and the plaintiffs were to invest Rs. 7.5 lakhs each and the shared profit and loss would be 50% of Samir Kumar Yadav and 25% each of the plaintiff no. 1 and 2 and a bank account was also to be opened by the plaintiff no.1 and Samir Kumar Yadav. Although the plaintiffs in their plaint have alleged that Samir Kumar Yadav had not taken any steps for opening the bank account but have completely omitted to say that the responsibility of opening the bank account was the joint responsibility of the plaintiff no. 1 and Samir Kumar Yadav. It is alleged that the partnership business of land development never commenced and bank account was also not opened and the entire money paid to Samir Kumar Yadav was utilised by Samir Kumar Yadav. As per the plaintiffs, the partnership agreement amongst the plaintiffs and Samir Kumar Yadav was entered and the plaintiffs also invested Rs.29 lakhs although they were to invest only 15 lakhs but the partnership business did not commence and in fact Samir Kumar Yadav did not have/purchase any land for development in Bhawanipur, which was the sole purpose of partnership and that the amount was fraudulently taken by Samir Kumar Yadav (deceased partner).
77. In order to escape the rigors and bar under Section 69 of the Act of 1932, it has been argued by the learned counsel for the plaintiffs- respondents that the suit arises out of civil liability and the plaintiffs are asserting common law right against Samir Kumar Yadav who fraudulently induced the plaintiffs to invest Rs. 29,00,000/- by falsely claiming to start a land development project at Bhawanipur which never existed.
78. In LPA No. 66 of 2006 (Ram Narayan Renu vs. The State of Bihar & Others) it has been held that right to recover money lost to the plaintiff by reason of an action or inaction on the part of the defendant is a common law right and unless there is express bar for exercising such common law right or withdrawal of such right by an 52 2025:JHHC:20764 express provision of law or unless the same is gathered by necessary implication, it cannot be inferred that the party had no right of action. It was submitted that as far as right to sue is concerned, it is common law or inherent right. The principle of ubi jus ibi remedium was also referred to submit that where there is a right there is remedy.
79. It has been argued that exhibits 2, 2/1 and 2/2 would reveal that Samir Kumar Yadav (in his individual capacity) took money from the plaintiffs for investing in a land development project. As per para 7 of the plaint, the plaintiffs came to know on enquiry that no land for land development business was ever purchased by Samir Kumar Yadav and in order to deceive the plaintiffs, Samir Kumar Yadav executed a deed of partnership dated 29.11.2012 (exhibit-1). It has been also alleged that after receiving money Samir Kumar Yadav played fraud and diverted the funds for his personal use. It was also asserted that as per clause 6 of the deed of partnership dated 29.11.2012, it was mandatory to open a bank account in the name of the firm, but no such account was opened by Samir Kumar Yadav and further from Exhibit-3, 3/1 and 3/2, it is apparent that Samir Kumar Yadav in his personal capacity had issued three post-dated cheques (as part payment) in the name of the plaintiff No. 1 when the plaintiffs after discovery of fraud by Samir Kumar Yadav demanded the amount of Rs. 29,00,000/- and therefore it is asserted that the plaintiffs have a common law right to recover their lost money from Samir Kumar Yadav in his personal capacity. The suit was filed on 15.12.2014 after the death of Samir Kumar Yadav who expired on 14.05.2014. As per the plaint, Samir Kumar Yadav and the plaintiffs executed partnership deed on 29.11.2012.
80. The perusal of partnership deed reveals that neither any details of the property at Bhawanipur has been mentioned nor it has been mentioned that Samir Kumar Yadav had invested Rs. 25,00,000/- to buy any land or had already bought any land. It has been simply mentioned that Samir Kumar Yadav had invested Rs. 25,00,000/- on the project. The partnership was at will and as per partnership deed, the plaintiffs were to invest Rs. 7,50,000/- each and the bank account 53 2025:JHHC:20764 was to be opened for the project and was to be operated jointly by Samir Kumar Yadav and Rama Shankar Roy. It was never the sole responsibility of Samir Kumar Yadav to open the bank account. The profit and loss were to be distributed amongst the partners to the extent of 50% to Samir Kumar Yadav and 25% each to the plaintiffs.
81. It has been alleged in the plaint that Samir Kumar Yadav showed about 40 acres of land pertaining to Khata No. 96 Plot No. 1327 and other plots of Mouza Bhawanipur and projected a very rosy picture regarding land development business and upon his insistence, the plaintiffs paid Rs. 29,00,000/-. However, no particulars have been mentioned in the plaint as to when Samir Kumar Yadav had showed the land of the aforesaid description.
82. In paragraph 7 of the plaint, an allegation has been made that after making huge investment of Rs.29,00,000/-, the plaintiffs started to inquire from Samir Kumar Yadav regarding the status of financial condition of the business and he on some pretext or the other did not give the actual status of the financial position of partnership business and later on, upon inquiry made by the plaintiffs, it was found that no land for land development business was purchased by Samir Kumar Yadav and in order to deceive the amount of the plaintiffs, Samir Kumar Yadav executed a deed of partnership, though actually no partnership business was started as nothing was invested by Samir Kumar Yadav in the business and he had taken Rs.29,00,000/- from the plaintiffs by playing fraud upon them.
83. This Court finds that while making aforesaid statement in paragraph 7 of the plaint, no foundational detail has been furnished as to when the plaintiffs enquired from Samir Kumar Yadav and when they discovered that no land was purchased by Samir Kumar Yadav for land development business. This is over and above the fact that it is not the case of the plaintiffs that Samir Kumar Yadav ever projected that the land of the aforesaid description was already purchased by Samir Kumar Yadav or ever belonged to Samir Kumar Yadav. As per the plaint Samir Kumar Yadav had only stated that he had already invested Rs. 25 lakhs in the land development business.
542025:JHHC:20764
84. It has been further asserted in paragraph 8 of the plaint that when the plaintiffs got information that Samir Kumar Yadav had no land in mouza Bhawanipur in Khata No.96, the plaintiffs started making demand of refund of their amount, which was taken by Samir Kumar Yadav. In connection with this statement also, no particulars have been mentioned in the entire plaint as to when and how the plaintiffs discovered the alleged fraud and when they demanded the amount back and when they were issued post-dated cheques by Samir Kumar Yadav. The fact remains that in spite of allegation of fraud, it was stated by the plaintiffs that at the request of Samir Kumar Yadav, they did not deposit the cheques.
85. Admittedly, the plaintiffs neither gave any notice seeking dissolution of the partnership firm on account of fraud nor took any steps to rescind the contract on account of fraud nor took any step for rendition of account of the partnership firm.
86. It was only after death of Samir Kumar Yadav, the plaintiff no.1 took steps to issue notice to his legal heirs and successors and then joined hands with plaintiff no.2 and also included the claim of defendant no.3 and filed suit for recovery of money of Rs.29 lakhs so as to recover the money from the property of Samir Kumar Yadav. Admittedly, one of the personal properties of Samir Kumar Yadav stood mortgaged to bank in the cash credit account of the proforma defendant no.3 in which Samir Kumar Yadav was also a guarantor. The plaintiffs alleged that the partnership business never started.
87. As already mentioned above , in entire plaint there is no allegation that Samir Kumar Yadav had ever told the plaintiffs or even the proforma defendant no.3 that he had already purchased land in Bhawanipur for land development business by investing Rs.25 lakhs, much less purchased particular land in Khata No. 96 and the partnership deed also does not refer to any purchase of land by Samir Kumar Yadav but it only refers that Samir Kumar Yadav had invested Rs.25 lakhs and the purpose for which Rs.25 lakhs was invested could only come to light if the plaintiffs had taken steps for rendition of the accounts of the firm, as on the date of filing the suit the partnership 55 2025:JHHC:20764 had already dissolved on account of death of the third partner Samir Kumar Yadav.
88. This Court finds that though allegation of fraud has been made in the plaint, but no foundational particulars with respect to date of the various incidents with regard to allegations made against Samir Kumar Yadav have been mentioned. This is over and above the fact that even as per the plaint Samir Kumar Yadav never projected that he had purchased any property in his name by investing Rs. 25 lakhs for land development business. In all the exhibits i.e. Exhibits 2, 2/1, 2/2 and Exhibit-A, it has been simply mentioned that partnership deed dated 29.11.2012 was entered into for developing the land in Mouza Bhawanipur in Khata No. 96 Plot No. 1327, but in these exhibits also, there is no mention that Samir Kumar Yadav ever purchased or ever projected that he had already purchased the aforesaid property for land development business.
89. The partnership deed is dated 29.11.2012 showing three partners, namely, Samir Kumar Yadav, Dina Nath Roy and Rama Shankar Rai.
90. This Court further finds that as per the deed of partnership dated 29.11.2012, Samir Kumar Yadav had already invested an amount of Rs. 25,00,000/- on the project mentioned in the deed of partnership and the capital investment was to be contributed by the 2 nd partner and 3rd partner to the extent of Rs. 7,50,000/- each and therefore the total capital investment would become Rs. 40,00,000/- and the profit and loss share proportion amongst three partners i.e. Samir Kumar Yadav, Dina Nath Roy and Rama Shankar Rai was in percentage ratio of 50% : 25% : 25%.
91. By virtue of deed of partnership dated 29.11.2012, the partnership had commenced and this court is of the considered view that commencement of partnership is not the same as commencement of partnership business. Further as per the deed of partnership, the bank account was to be opened for the particular project in any bank at Bokaro Steel City and was to be operated jointly by Samir Kumar Yadav and Rama Shankar Rai, but as per the records no bank account 56 2025:JHHC:20764 was opened. In the meantime, Samir Kumar Yadav expired in the year 2014. It is the case of the plaintiffs that they had made investment in the partnership firm of Rs. 16,00,000/- in cash and certainly the cash investment has nothing to do with opening of bank account.
92. This Court finds that the plaintiffs had filed the suit for realization of the amount invested in the partnership firm, but instead of filing a suit for accounts upon dissolution of the firm on account of death of Samir Kumar Yadav, they filed the suit for realization of their alleged contribution made to the firm by alleging that Samir Kumar Yadav had defrauded them and induced them to make investment in the partnership firm.
93. This Court is of the considered view that allegation of fraud was made without any foundational particulars, after death of the partner Samir Kumar Yadav when the partnership was already dissolved due to death of one of the partners, namely, Samir Kumar Yadav and the suit was also decreed without production of the accounts of the partnership firm. The learned trial court has not recorded any finding as to when deceased partner Samir Kumar Yadav committed the alleged fraud and when and how and upon what enquiries and from whom the plaintiffs and the defendant no.3 discovered the fraud alleged to have been committed by deceased partner Samir Kumar Yadav. These foundational facts were neither pleaded nor proved by the plaintiffs. Such foundational pleadings are not only required for identifying the cause of action for the purposes of limitation etc but also required to be pleaded and adequately proved by the person who alleges fraud to claim a relief on account of fraud . The pleadings assume importance as the allegation of fraud has to be proved beyond reasonable doubt and the defendant should have an opportunity to respond to the particulars of such pleadings and take an adequate defense. It is in this backdrop, the party alleging fraud has to stick to the foundational pleading of fraud and is not permitted to go beyond pleading. When foundational pleadings on fraud are missing, the suit based on fraud has to fail and the rigors of statutory bar under section 69 will come into play when it relates to allegation of fraud 57 2025:JHHC:20764 against a partner of a partnership firm unregistered under the Act of 1932. In absence of fraud, the statutory bar under section 69 of the Act of 1932 is not excluded.
94. This court is of the considered view that the plaintiffs have made allegations of fraud without material particulars and have also failed to prove the allegations of fraud. There is neither any proper and particular pleadings with regards to the allegation of fraud giving the foundational details nor there is any proof of fraud against Samir Kumar Yadav. The suit was filed with allegation of fraud to completely oust the remedies, rights and liabilities of partners under the Act of 1932 and to directly realise the amount so contributed in the partnership firm from the legal heirs and successors of the deceased partner. The remedy was certainly available for rendition of accounts of the partnership firm under section 69(3) of the Act of 1932 when the partnership stood dissolved upon death of the partner Samir Kumar Yadav and even a remedy was available for dissolution of the firm during life time of Samir Kumar Yadav, which the plaintiffs or the defendant no. 3 did not avail. The plaintiffs were seeking to recover the capital contribution of Rs.16 lakhs as per the partnership deed which they claimed to have paid in cash and for realisation of further payment of Rs.13 lakhs by the defendant no.3 being the contribution in the partnership business by alleging that the partnership business never started. However, the fact remains that partnership had commenced and merely because the partnership business was never started that does not take the matter outside the coverage of the Act of 1932.
95. In view of the aforesaid findings, this point of determination no. (iii) is decided in favour of the appellants and against the respondents.
Points of determination no. (iv) and (v)
96. Section 69 of the Act of 1932 deals with the effect of non- registration, which is quoted as under: -
"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 58 2025:JHHC:20764 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. (2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.
(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect--
(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or
(b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1920, to realise the property of an insolvent partner.
(4) This section shall not apply--
(a)..............................................................."
97. At this stage it would be relevant to refer to the judgements rendered by the Hon'ble Supreme Court in the context of bar to civil suit under section 69(2) of the Act of 1932, in particular, judgment in the case of Raptakos Brett and Co (supra) reported in (1998) 7 SCC 184 which has been explained in the judgement passed in the case of Haldiram Bhujiawala (supra), reported in (2000) 3 SCC 250 and Purushottam (supra) reported in (2007) 15 SCC 58 and has also been considered and summarized in the judgement passed in the case of Shiv Developers (supra) decided by Hon'ble Supreme Court in Civil Appeal No. 785 of 2022, whose paragraph 16.2 [in the context of the judgement of Raptakos Brett and Co (supra)] and paragraph 17 are quoted as under
:-
"16.2 This Court further exposited on the scope of the words "enforcing a right arising under the contract", as used in Section 69(2) of the 1932 Act; and after a detailed survey of the reports and precedents which led to the frame of the said provision as also after reference to various authorities on the point, this Court explained the rationale and object of the provision that the same was intended to protect those in commerce who deal with a partnership firm in business, inasmuch as they ought to be enabled to know the names of the partners of the firm before they deal with them in business;59
2025:JHHC:20764 and the bar of Section 69(2) is not attracted to any and every contract referred to in the plaint as a source of title to an asset owned by the firm. This Court held and explained as under: "23. The further and additional but equally important aspect which has to be made clear is that the contract by the unregistered firm referred to in Section 69(2) must not only be one entered into by the firm with the third-party defendant but must also be one entered into by the plaintiff firm in the course of the business dealings of the plaintiff firm with such third-party defendant.
24. ... The real crux of the question is that the legislature, when it used the words "arising out of a contract" in Section 69(2), it is referring to a contract entered into in course of business transactions by the unregistered plaintiff firm with its defendant customers and the idea is to protect those in commerce who deal with such a partnership firm in business. Such third parties who deal with the partners ought to be enabled to know what the names of the partners of the firm are before they deal with them in business.
25. Further, Section 69(2) is not attracted to any and every contract referred to in the plaint as the source of title to an asset owned by the firm. If the plaint referred to such a contract it could only be as a historical fact. For example, if the plaint filed by the unregistered firm refers to the source of the firm's title to a motor car and states that the plaintiff has purchased and received a motor car from a foreign buyer under a contract and that the defendant has unauthorisedly removed it from the plaintiff firm's possession, -- it is clear that the relief for possession against the defendant in the suit does not arise from any contract which the defendant entered into in the course of the plaintiff firm's business with the defendant but is based on the alleged unauthorised removal of the vehicle from the plaintiff firm's custody by the defendant. In such a situation, the fact that the unregistered firm has purchased the vehicle from somebody else under a contract has absolutely no bearing on the right of the firm to sue the defendant for possession of the vehicle. Such a suit would be maintainable and Section 69(2) would not be a bar, even if the firm is unregistered on the date of suit. The position in the present case is not different."
17. The aforesaid decision in Haldiram Bhujiawala(supra) was further considered and applied by this Court in Purushottam (Supra) while holding as under :
"24. With respect, we find ourselves in complete agreement with the principles enunciated in Haldiram Bhujiawala. Having regard to the purpose Section 69(2) seeks to achieve and the interest sought to be protected, the bar must apply 60 2025:JHHC:20764 to a suit for enforcement of right arising from a contract entered into by the unregistered firm with a third party in the course of business dealings with such third party. If the right sought to be enforced does not arise from a contract to which the unregistered firm is a party, or is not entered into in connection with the business of the unregistered firm with a third party, the bar of Section 69(2) will not apply."
98. The Hon'ble supreme court while applying the aforesaid position in law referred to the transaction involved in the said case whose significant feature was the sale of shares by the unregistered plaintiff firm to the contesting defendant and not the one arising out of the business of the partnership firm and it was held in paragraph 20 of the judgement that the transaction in question was not the one entered into by the plaintiff firm during the course of business (of building construction) and it had been an independent transaction of sale of firm's share in the suit property to the contesting defendant and therefore the bar under section 69(2) of the Act of 1932 was not applicable. The Hon'ble Supreme Court while holding the suit maintainable also held that the subject suit cannot be said to be the one for enforcement of right arising from a contract; rather the subject suit is clearly the one where the plaintiff seeks common law remedies with the allegations of fraud and misrepresentation as also the suit is for 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) and ultimately held that the bar of Section 69(2) of the Act of 1932 does not apply to the case. Paragraph 20 of the aforesaid judgment is quoted as under: -
"20. To put it differently, the relevant principles, when applied to the facts of the present case, leave nothing to doubt that the transaction in question was not the one entered into by the plaintiff firm during the course of its business (i.e. of building construction); and it had been an independent transaction of sale, of the firm's share in the suit property, to the contesting defendants. The bar of Section 69(2) is not attracted in relation to the said sale transaction. Moreover, the subject suit cannot be said to be the one for enforcement of right arising from a contract; rather the subject suit is clearly the one where the plaintiff seeks common law remedies with the allegations of 61 2025:JHHC:20764 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 1932 Act does not apply to the present case."
99. Upon conjoint reading of section 69 (1) and (2) of the Act of 1932 read with the judgements relied upon by the parties, this court finds that the law relating to bar under section 69 has been crystalized in the recent judgement passed by the Hon'ble Supreme Court reported in 2025 SCC Online SC 125 (supra), wherein it has been held that though section 69 (1) and (2) of the Act of 1932 assumes a mandatory character, but the bar of filing the civil suit under section 69 of the aforesaid Act of 1932 will not apply if the suit is filed for enforcement of any statutory right or for enforcement of common law rights. In the said case, the petitioners before the Hon'ble Supreme Court had not filed the suit for enforcing any statutory right conferred under any other law or a common law right so as to exempt the application of Section 69 and hence it was held that the rigors of Section 69(1) would apply on such a suit and the partnership firm being unregistered would prevent the petitioners from filing a bare suit for recovery of money from the respondent. In the said case it has also been held that mere fact that the partnership business had not commenced does not take the case out of the rigors of bar to suit under section 69 of the Act of 1932. Paragraph 8, 15 and 16 of the aforesaid judgement are quoted as under: -
"8. It is evident from a reading of sub-sections (1) and (2) of Section 69 that it assumes a mandatory character.
Section 69(1) prohibits a suit amongst the partners of an unregistered partnership firm, for the enforcement of a right either arising from a contract or conferred by the Act, unless the suit amongst the partners is in the nature of dissolution of the partnership firm and/or rendition of accounts. Section 69(2) prohibits the institution of a suit by an unregistered firm against third persons for the enforcement of a right arising from a contract. As a consequence, a suit filed by an unregistered partnership firm and all proceedings arising thereunder, which fall 62 2025:JHHC:20764 within the ambit of Section 69 would be without jurisdiction.
9.............
15. It is a clear as a noon day that the present suit had not been instituted by or on behalf of the firm against any third persons so as to fall under the ambit of Section 69(2). The petitioners have also not filed the instant suit for enforcing any statutory right conferred under any other law or a common law right so as to exempt the application of Section 69. Hence, the rigours of Section 69(1) would apply on such a suit and the partnership firm being unregistered would prevent the petitioners from filing a bare suit for recovery of money from the respondent.
16. It would have instead been appropriate for the petitioner to have preferred a suit for dissolution of the partnership firm and rendition of accounts, especially considering that the factum of non-registration of the partnership firm would not have acted as bar in a suit for dissolution in light of the exception carved out under Section 69(3). The defence that the partnership business had not yet commenced and thus, such a suit for dissolution could not have been preferred, would not be of any avail to the petitioners, particularly for overcoming the jurisdictional bar under Section 69(1). The High Court is right in taking the view that a suit of such nature could not be said to be maintainable in the absence of the registration of the partnership firm." (emphasis supplied)
100. While deciding issue no. 3 as to Whether the suit is barred by Section 69(2) of Indian Partnership Act, 1932? - the learned trial court recorded as under: -
"As discussed above, it is admitted case that the said firm is unregistered firm as it was not registered before Registrar of Firm and the names of the partners were not included in the registrar of firm. However, from the oral and documentary evidence, it is evidently clear that actually the partnership business never started and by playing fraud upon the plaintiffs, Samir Kumar Yadav. husband of the Defendant No.01 and the father of the Defendant No. 02 took Rs.29,00,000/-, out of which Rs.13,00,000/- was taken from the Defendant and Samir Kumar Yadav also induced the Defendant No.03 to enhance cash credit of his account lying with 63 2025:JHHC:20764 Allahabad Bank as Samir Kumar Yadav mortgaged his property and became guarantor of proforma Defendant No.03 as he mortgaged his immovable property and thereafter, the cash credit limit of the Defendant No.03 was enhanced upto Rs.30,00,000/- and the Defendant No.03 after withdrawing the amount from the bank had given Rs.13,00,000/- to the plaintiffs and Samir Kumar Yadav through different cheques and to this effect, one money receipt (vide Exhibit-B) was also issued by the plaintiffs in which Samir Kumar Yadav became witness.
The oral and documentary evidence regarding non-inception of partnership business, playing deception upon the plaintiffs and Defendant No.03 and taking of Rs.29,00,000/- by Samir Kumar Yadav have not been controverted by the Defendant No.01 and 02 who are the legal heirs of Samir Kumar Yadav and enjoying the property which was mortgaged by Samir Kumar Yadav to enhance the cash credit limit of Defendant No.03 and the Defendant No.03 is paying interest on the said amount and these facts have not either been controverted or challenged by the Defendant No.01 and it has become unimpeached and unrebutted.
Now, in the light of above discussions, Section 69(2) of the Indian Partnership Act, 1932 and relevant principles are being discussed herein below that the bar engrafted u/s 69 of Indian Partnership Act, 1932 is applicable in the case on hand or not.
For dealing with the question raised in this issue, it may be taken note of the provisions contained in Section 69(2) of the Act of 1932 as follows................................................ Ld. Counsel for the plaintiff further argued that the question arising in this issue could be directly answered with reference to the principles enunciated by the Hon'ble Supreme Court in the case of Raptakos Brett & Co. Ltd. Vs. Ganesh Property which have been further explained and applied by the Hon'ble Supreme Court in the case of Haldiram Bhujiawala and Purushottam, In Haldiram Bhujiawala case the Hon'ble Supreme Court has laid down principles that to attract the bar of Section 69(2) of Indian Partnership Act, 1932, the contract in question must be the one entered into by firm with the third party defendant and must also be the 64 2025:JHHC:20764 one entered into by the plaintiff firm in the course of its business dealings; and that Section 69(2) of the Act of 1932 is not a bar to a suit filed by an unregistered firm, if the same is for enforcement of statutory right or common law right.
In the suit at hand that no contract has been entered into by the firm or the partners of the firm with the third party (defendants) nor it was entered into by the plaintiff's firm or plaintiffs in the course of its business dealing, rather the admitted fact is that the husband of the Defendant No.01 and father of the defendant no 02 i.e. Samir Kumar Yadav by playing fraud upon the plaintiffs and the Defendant No.03 took Rs 29,00,000/- and when it was detected nothing was invested by Samir Kumar Yadav nor he had any land in Khata No.96. Thereafter, the plaintiffs started to make demand and in order to repay the said amount, Samir Kumar Yadav had Issued three cheques having total amount of Rs.10,00,000/- and all these facts clearly suggestive of this fact that actually no partnership business had started and the amount was taken by Samir Kumar Yadav by playing fraud upon the plaintiffs and the Defendant No.03 as such the bar engrafted u/s 69(2) of the Act of 1932 and the principles vividly exposited in Raptakos Brett & Co. Ltd. Vs. Ganesh Property and Haldiram Bhujiawala and Purushottam is not applicable in the case at hand because the plaintiffs have filed the suit for enforcement of statutory right or a common law right.
While answering the Issue No.01 in Haldiram Bhujiwala case, the Hon'ble Supreme Court referred ......................
Taking up the facts of the present case, one of the significant features herein is that actually no partnership business had Initiated, rather by playing fraud and deception, Samir Kumar Yadav took Rs.29,00,000/- from the plaintiffs including Rs.13,00,000/- from proforma defendant/Defendant No.03 and in order to repay the amount issued three cheques and in the meantime he died.
The transaction in question is clearly between the parties for the purpose of business transaction and Samir Kumar Yadav by playing fraud upon the plaintiffs and the Defendant No.03 took Rs. .29,00,000/-65
2025:JHHC:20764 from them and no evidence has been adduced by the Defendants that actually the partnership business had started and there was vast tract of land was in the name of Samir Kumar Yadav and the same was incorporated for the partnership business. As such it can be safely inferred that the transaction arising out of contract with the third party and this factual aspect is apparent from the basic plaint averments, oral and documentary evidence on record.
Therefore, the bar of Section 69(2) of the Act of 1932 doesn't apply to the present case, as such the Issue No. 03 is decided in favour of the plaintiffs and against the Defendant No.01 & 02.
101. While recording the aforesaid findings, the learned trial court clearly recorded that-
A. the partnership deed dated 29.11.2012 amongst plaintiffs and deceased Samir Kumar Yadav was registered under the Registration Act, but was not registered under the Indian Partnership Act, 1932.
B. the transaction in question is clearly between the parties for the purpose of business transaction;
C. one of the significant features is that actually no partnership business had initiated, rather by playing fraud and deception, Samir Kumar Yadav took Rs.29,00,000/- from the plaintiffs including Rs.13,00,000/- from proforma defendant/Defendant No.03 and in order to repay the amount issued three cheques and in the meantime he died. (16 lakhs in cash from the plaintiffs and 13 lakhs through cheque from defendant no. 3); D. no partnership business had initiated and in fact no evidence was adduced by the Defendant nos. 1 and 2 that actually the partnership business had started;
E. no evidence has been adduced by the Defendant no. 1 and 2 that there was vast tract of land in the name of Samir Kumar Yadav and the same was incorporated for the partnership business;
662025:JHHC:20764 F. there is no involvement of any third party therefore the suit was not barred under section 69(2) of the Indian Partnership Act, 1932;
G. otherwise also, section 69(2) of the Act of 1932 was not applicable in the case at hand because the plaintiffs filed the suit for enforcement of statutory right or a common law right.
102. This court is of the considered view that so far as the bar of suit under section 69(2) of the Act of 1932 is concerned , it has been rightly held to be not applicable as the suit was primarily between the plaintiffs [who were also the partners of the unregistered firm] and the legal heirs and successors of the deceased partner and the suit was not relating to enforcement of a right against third party arising from a contract with the partnership firm. Section 69(2) prohibits the institution of a suit by an unregistered firm against third persons for the enforcement of a right arising from a contract with third parties .
103. This is in consonance with the judgements rendered by the Hon'ble Supreme Court in the context of bar to civil suit under section 69(2) of the Act of 1932 in the case of Raptakos Brett and Co (supra) reported in (1998)7 SCC 184 which has been explained in the judgement passed in the case of Haldiram Bhujiawala (supra), reported in (2000) 3 SCC 250 and Purushottam (supra) reported in (2007) 15 SCC 58 and has also been considered and summarized in the judgement passed in the case of Shiv Developers (supra) decided by Hon'ble Supreme Court in Civil Appeal No. 785 of 2022, as discussed above.
104. In the present case, the learned trial court held that bar under Section 69(2) of the 1932 Act will not apply on both the counts-
(a) the case is not relating to any third-party contract with the partnership firm and
(b) that the plaintiffs were seeking to enforce common law rights for recovery of the amount fraudulently received by Samir Kumar Yadav (deceased partner) from the plaintiffs/defendant No.3.
105. Since, this court has held above while answering point of determination no. (iii) that the allegation of fraud by Samir Kumar 67 2025:JHHC:20764 Yadav (deceased partner) has neither been properly pleaded nor proved, the finding of the learned trial court with respect to bar under section 69 (2) of the Act of 1932 is sustained only on the ground that the case is not relating to any third-party contract with the partnership firm.
106. While recording the aforesaid findings, the learned trial court has neither framed any issue nor recorded any finding with respect to bar under section 69(1) of the Indian Partnership Act, 1932. The present case certainly does not involve enforcement of any statutory right and no such argument has been advanced on behalf of the respondents (plaintiffs) that the suit involved enforcement of any statutory right. As already held above, the allegation of fraud against the deceased partner Samir Kumar Yadav has neither been properly pleaded nor proved and accordingly, the argument of the respondents (plaintiffs) that they were seeking to enforce common law right on account of fraud is also not sustainable.
107. The argument on behalf of the respondents (plaintiffs) is that the suit involves enforcement of common-law right-on account of fraud and also the fact that partnership business never commenced and that the entire amount was taken by Samir Kumar Yadav in his individual capacity and was to be recovered from the property of Samir Kumar Yadav which was being enjoyed by his legal heirs and successors, the defendant no. 1 and 2. It is also their case that claim of the plaintiffs was outside the purview of the partnership and hence the suit was maintainable. It is their case that in order to deceive the plaintiffs, Samir Kumar Yadav had executed a deed of partnership dated 29.11.2012 (exhibit-1) but after receiving the money from the plaintiffs, both directly and through the proforma defendant no. 3, Samir Kumar Yadav played fraud upon the plaintiffs and diverted the entire fund to his personal use. It has further been argued that the learned trial court has rightly held that since no actual business had commenced and the suit was based on allegation of fraud, the bar under Section 69 does not apply. On the other hand, it is the case of the the appellants (defendant no.1 and 2) that the plaintiffs cannot 68 2025:JHHC:20764 file suit to enforce a right arising from a contract i.e., partnership agreement against Samir Kumar Yadav (deceased partner) from his legal heirs (defendant no.1 and 2) and the bar under section 69 (1) of the Act of 1932 would apply.
108. This court finds that it was the plaintiffs' own case that the amount was paid by the plaintiffs for the partnership business; the amount was an investment in partnership business and the money receipts as exhibited also showed that the alleged amount was given in the partnership business. Admittedly, the partnership firm was formed through registered deed, registered under the registration act and contribution of the plaintiffs in the partnership was also mentioned. It was the case of the plaintiffs that they had given money for the partnership business and pursuant to the partnership deed. In such circumstances it cannot be said that the entire alleged amount was taken by Samir Kumar Yadav in his individual capacity and not as a partner so as to maintain the suit.
109. Section 69(1) of the Act of 1932 bars enforcement of right by or on behalf of a person suing as a partner and against the person who has been a partner unless the partnership firm is registered under the Act of 1932. The suit was certainly barred under section 69 (1) of the Act of 1932.
110. Section 69(1) of the Act of 1932 clearly provides that no suit to enforce a right arising from a contract or conferred by the Act of 1932 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.
111. The present suit was filed by the two partners of unregistered partnership firm for realisation of money invested in the partnership firm from the legal heirs of the deceased partner, Samir Kumar Yadav. Further, the argument that the partnership business had not yet commenced and thus, such a suit was maintainable is of no avail to the plaintiffs for overcoming the jurisdictional bar under Section 69(1). The formation of partnership firm is different from commencement of business of partnership firm. Once a partnership 69 2025:JHHC:20764 firm is formed and partners contribute in the partnership as capital or for business, the bar under section 69 (1) of the Act of 1932 would be applicable in connection with filing of the suit seeking enforcement of right by or on behalf of a partner against another partner, unless the partnership firm is registered under the Act of 1932.
112. This court is of the considered view that in the present case the suit is barred in terms of section 69(1) of the Act of 1932 as the plaintiffs are seeking to recover the amount invested in the unregistered partnership firm/ partnership business. They claim to have invested 15 lakhs as capital (7.5 lakh by each plaintiff) in terms of the partnership deed and claim to have additionally invested Rs. 1 lakh in partnership business, total Rs.16 lakhs in cash.
113. Section 69(3) of the Act of 1932 provides that the bar to institute suit under Section 69(1) and under Section 69(2) shall also apply, inter alia, to other proceedings to enforce a right arising from a contract, but shall not affect the enforcement to any right to sue for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm.
114. In the present case, the partnership stood dissolved prior to filing of the suit on account of death of Samir Kumar Yadav (deceased partner) and the suit has been filed for recovery of alleged investment in the partnership firm from the legal heirs and successors of Samir Kumar Yadav (deceased partner) by alleging fraud against deceased partner Samir Kumar Yadav and consequently seeking enforcement of common law right without availing the remedy of rendition of accounts of the partnership firm in terms of Section 69(3) of the Act of 1932. As held above, the allegation of fraud has neither been properly pleaded nor proved. Consequently, bar under section 69(1) comes into play and the only remedy left was seeking rendition of accounts of the partnership firm in terms of section 69(3) of the Act of 1932.
115. In order to wriggle out from the aforesaid bar to suit under Section 69(1) of the Act of 1932, it has been argued by the plaintiffs that the suit was filed in their individual capacity primarily seeking to 70 2025:JHHC:20764 recover the payment made by the plaintiffs/Defendant No.3 to Samir Kumar Yadav (deceased partner) in his individual capacity and therefore, it has been argued that the suit was maintainable in spite of non-registration of the partnership deed dated 29.11.2012 under the Act of 1932 and the suit was not barred under Section 69(1) of the Act of 1932. It is also their specific case that the partnership business never commenced and therefore, bar under Section 69 of the Act of 1932 was itself not maintainable.
116. The aforesaid argument is devoid of any merits. It was never the case of the plaintiffs that they had given money to Samir Kumar Yadav (partner) in his individual capacity. Plaintiffs, according to their own case, had entered into the partnership business with Samir Kumar Yadav and they had invested in the partnership business as partners of the firm and were seeking recovery of the money paid which according to them was diverted for his own use by Samir Kumar Yadav. The plaintiffs proceeded without seeking rendition of the account of the partnership firm although their case was that the they had invested in the partnership business.
117. As a cumulative effect of the aforesaid findings, it is held that the suit was not barred under section 69(2) of the Act of 1932 but was barred under section 69(1) of the Act of 1932.
118. The finding and the consequences are summarized as under:-
i. The point of determination no. (i) has been decided against the respondents (plaintiffs) and in favour of the appellants and it is held that the plaintiffs could not have claimed a sum of Rs. 13 lakhs on behalf of Ram Das Singh i.e., sole proforma defendant.
ii. The point of determination no. (ii) has been decided in favour of the respondents (plaintiffs) and against the appellants and it is held that the suit was not barred by section 5 read with section 8 of the Arbitration and Conciliation Act, 1996. iii. The point of determination no. (iii) has been decided against the respondents (plaintiffs) and in favour of the appellants and it is held that the plaintiffs have neither properly pleaded 71 2025:JHHC:20764 nor proved the allegation of fraud against Samir Kumar Yadav (deceased partner).
iv.The point of determination no. (iv) has been decided against the appellants and in favour of the respondents (plaintiffs) and it is held that the suit was not barred by section 69(2) of the Act of 1932.
v. The point of determination no. (v) has been decided in favour of the appellants and against the respondents (plaintiffs) and it is held that the suit was barred by section 69(1) of the Act of 1932. The firm being unregistered, the plaintiffs had a remedy to seek rendition of accounts of the firm in terms of section 69(3) of the Act of 1932.
119. Consequently, the suit is held as not maintainable in view of bar under section 69(1) of the Act of 1932.
120. The impugned judgment passed by the learned Sub-Judge-IV, Bokaro in Money Suit No.62 of 2014 is set-aside except to the extent it relates to point of determination no (ii) and (iv). Consequently, the impugned money decree is also set-aside.
121. This First appeal is allowed in the aforesaid terms.
122. Pending interlocutory application, if any, is closed.
123. Office to prepare decree.
124. Let this judgement be communicated to the learned court concerned through FAX/e-mail.
(Anubha Rawat Choudhary, J.) Pankaj/AFR 72