Calcutta High Court
Broadway Centre vs Gopaldas Bagri on 1 February, 2002
Equivalent citations: AIR2002CAL78, AIR 2002 CALCUTTA 78, (2002) 2 CIVILCOURTC 472, (2002) 4 RECCIVR 733, (2002) 2 ICC 201, (2002) CAL WN 605
Author: Kalyan Jyoti Sengupta
Bench: Kalyan Jyoti Sengupta
ORDER Kalyan Jyoti Sengupta, J.
1. This suit has been brought by a registered partnership firm against one of its erstwhile partner for the relief of permanent injunction restraining the defendant and/or his agents and/or his representatives from disturbing and interfering with possession, occupation, administration and enjoyment of the property being the market in question and also decree for damages of Rs. 4,00,00,000/-(four crores). The short fact in the plaint is briefly stated here-under:
2. The property in question is Market being premises Nos. 14, 14/1, 14/2 and 14/ 3, Old China Bazar Street, Calcutta which situates at commercial hub in the city of Calcutta commonly known as "Vikam Chand Market" (hereinafter referred to as the said property). The said properly was one of the joint family properties of Bagri family. The defendant was one of the coparceners of the said Bagri family. Coparceners and/or co-sharers of Bagri family filed a Partition Suit being Suit No. 1736 of 1959 in the year 1959 in which the defendant was a party co-sharer and/or co-owner having undivided 1/5th share and the said property was one of the subject matters. It was decided by the Court that the said property would be allotted to one or two of co-sharer and indeed once it was allotted to one Chand Ratan Bagri and Uttam Kumar Bagri at a price of rupees 33 lakhs. However, the said order was set aside and ultimately this Hon'ble Court in the aforesaid partition suit directed to re-sell and/or re-allot the same at a greater price after the valuation being done. The defendant having no sufficient fund to bid in the aforesaid re-sale, approached one Gwal Das Karnani, one Ghanashyamdas Kankani and one Mahesh Mimani for the fund on his representation and/or assurance that he would form a partnership with the aforesaid three persons after the said property had been purchased and/or allotted in the possible re-sale. Accordingly, all the aforesaid three persons and the defendant agreed to form a partnership. So, the aforesaid three persons paid an aggregate sum of Rs. 48,79,999/-to enable the defendant to buy up by way of allotment of the said property after adjustment of his share therein at a price of rupees 61 lakhs. The order of sale and/or re-allotment was passed in the partition suit on 25th August, 1989. Simultaneous with purchase of the said property by and under a deed of partnership dated 15th September, 1989 the aforesaid three persons and the defendant entered into a partnership in the name and style of Broadway Centre, viz., the plaintiff herein. The shares of the four partners were as follows :--
(i) Gopaldas Bagri (defendant) - 20%
(ii) Ghanashyamdas Kankani - 50%
(iii) Gwaldas Karnani - 15% (iv) Mahesh Mimanl - 15%
3. The defendant's share in the firm was valued having regard to his deemed capital contribution being the aforesaid amount of rupees 12 lakhs and odd and Ghanashyamdas Kankani contributed largest amount, viz., more than rupees 30 lakhs. After formation of the partnership, all partners acted upon accordingly for realization of rents, issues and profits for development of the market. However, mutual relation of defendant qua partner with other three partners was impaired and the defendant could not continue with this partnership firm and asked for retirement. So, on payment of a sum of Rs. 12,20,000/- and another sum of Rs. 1,00,000/- Incurred by him on account of payment of rates and taxes to the Calcutta Municipal Corporation defendant retired from the said partnership. The deed of retirement was also executed on 4th April, 1992 together with an affidavit of the defendant recording the factum of retirement which was duly notarized. The defendant while acting and retiring as a partner reflected the said fact in income tax returns for the assessment years 1989-90, 1990-91, 1991-92 and 1992-93 on which assessment orders were passed and upon retirement he also informed the respective tenants for attornment in name and favour of the plaintiff. The said factum of retirement was duly notified to the Registrar of Firms. In spite of all these, the defendant, however, is denying the plaintiffs right, title and enjoyment of the said property as owner thereof. On retirement of defendant, the aforesaid three persons are the present partners who have their shares re-allocated according to the capital contribution. In furtherance of this denial of the plaintiffs ownership, right of possession and enjoyment, the defendant has been instigating the tenants or occupants not to pay any rent, occupation charges and other charges and further allowed unauthorized persons to occupy quite good number of spaces and stalls of the said market. As a result thereof the plaintiff has suffered loss and damages that is assessed at rupees four crores and claims to recover the same from the defendant.
4. The substance of the defence is that the said partnership was never acted upon, besides the partnership deed is sham document and the deed of retirement was procured in the police station on coercion and threat. Moreover, the said property was not lawfully transferred in favour of the partnership. The payment of rupees 12 lakhs and odd was for some other transaction as and by way of share of collection of the rents, issues and profits as it was agreed that after purchase of the said property the aforesaid three persons and the defendant would jointly manage the market.
5. This Court at earlier stage framed only two issues, viz. (i) whether the plaintiff is the owner of the market and (ii) whether the plaintiff is entitled to damage as claimed by it.
6. The plaintiff examined two witnesses while the defendant examined four witnesses. That apart, various documents, viz. Income Tax Returns of the defendant, records of the Bank Account. CESC and Municipal records were produced under subpoena and were exhibited.
7. Mr. P. K. Roy, learned Senior Advocate appearing with Mr. Ranjan Deb, learned Senior Advocate and Mr. Shyamal Sarkar, learned Advocate for the plaintiff while highlighting the fact, submits that, the aforesaid three persons, viz., Gwaldas Karnani, Ghanashyamdas Kankanl and Mahesh Mimani who are the partners of the plaintiff paid an aggregate sum of Rs. 48,80,000/-and balance sum of Rs. 12,20,000/- out of aggregate sale price of Rs. 61,00,000/- was adjusted against the price of the sale as the same was the share of owelty money of the defendant in the partition suit. The said amount of Rs. 12,20,000/- was defined to be the deemed share capital contribution and as such it was worked out as his share at 20% of the said partnership business.
8. He submits that formation of the partnership firm was document in the deed. Sale is proved by the order dated 15th September, 1989 though in the name of the defendant. The said certified copy of the order of sale was duly registered with the Registrar of Assurance, Calcutta which is exhibited being Exhibit 'C'. The said property though purchased ostensibly by the defendant was brought as the asset into partnership firm. So, the said market is the asset and property of the plaintiff. All the partners have signed the said partnership deed and subsequently it was registered under the Indian Partnership Act. 1932. The defendant Indeed has admitted to have executed the said partnership deed.
9. He submits that after formation of the partnership, a bank account was opened with the Oriental Bank of Commerce on 27th March, 1990 in the name of the plaintiff firm having No. 11125. In the specimen signature card of this bank account the signatures of all the partners including the defendant would be appearing. The said bank account was operated by the partners while making payments for outgoing of the partnership business. All the partners applied for registration of the firm and the original application for registration was brought on subpoena from the Registrar of Firms, West Bengal and the same is exhibited. It will be apparent from all these documents that all these four persons signed and acted as partners.
10. He submits that receipts were Issued while realizing rents from the tenants by the plaintiff immediate after purchase of the said property. Municipal rates and taxes were also paid from the fund of the partnership. It will appear from the income-tax returns containing accounts (Exhibits 'M', 'N', 'O', 'P and 'Q') filed by the defendant for the years 1988-89, 1989-90, 1990-91, 1991-92 and 1992-93 after allotment of the property followed by formation of partnership and his retirement the defendant never claimed as owner of the said property. After retirement it will be seen in his Income-tax returns that his share capital in the partnership firm was not shown. He retired from the partnership firm by executing a deed dated 4th April, 1992 on receipt of a sum of Rs. 13.70 lakhs in aggregate which includes his deemed share capital of rupees 12 lakhs and odd. He has received it admittedly. Thereafter he executed deed of retirement on 4th April, 1992 followed by swearing an affidavit before the Notary Public dated the April, 1992 recording the fact of partnership and his retirement. Besides in another suit in an affidavit on 7th July, 1992 he has specifically admitted that he retired from the partnership firm by executing a deed of retirement dated 4th April, 1992. He has also admitted in the said affidavit that he has been paid his deemed share capital of a sum of rupees 12 lakhs and odd. He has also specifically admitted that he was not claiming any interest in the said property any longer as he had retired.
11. Mr. Roy contends that the defence of the defendant is wholly unbelievable in the context of the aforesaid documentary evidences and his own admission in his oral evidence. The allegation of the said partnership deed being sham one and non est is absolutely untenable and should be rejected by this Court. He has not challenged the aforesaid partnership deed nor the deed of retirement asking for concellation thereof. He was given a chance in his cross-examination with regard to the affidavit affirmed and filed in the suit. He has not denied nor he tried to explain his admission otherwise. He contends on point of law that admission of a person is a conclusive proof unless it is explained. In support of his submission he has relied on a decision of the Supreme Court .
12. As far as passing of title of the property is concerned, he submits that, it is not necessary that a partnership deed has to be registered under the Registration Act even if any immovable property is brought in hotchpotch of the partnership. The certified copy of the order of sale was registered by which the said property was purchased by the defendant who ultimately became partner of the plaintiff. Accordingly, he submits that, this Court should decide the first issue of ownership in favour of the plaintiff negativing frivolous contention of the defendant.
13. As far as question of damage is concerned, he submits, because of defendant's wrongful contention and actively wrongful instigation to the tenants, the plaintiff could not realize rents nor could take steps against the unauthorized occupants who are brought in by the defendant. Therefore, the plaintiff has suffered loss and damages of rupees six lakhs. In the event this Court does not find any specific proof thereof then his client prays for reference to the Special Referee for ascertaining mesne profit and damages.
14. Mr. Tibrewal, learned Senior Advocate, on the other hand, submits that the defendant had sufficient funds to buy up the said property without any outside help. So, he had no reason to approach the aforesaid three persons for funds as alleged. He had no intention to form any partnership firm and the document, which was got signed or executed, as a sham one. It will appear from the document itself the same was not a valid one. According to him the partnership deed is interpolated as far as date of execution is concerned. Initially it was mentioned as 15th September, 1989, thereafter it was changed as 30th March, 1990 for notarization then against date was written as 15th September, 1989. Even in the application for registration of firm it was mentioned that firm was formed as on 25th August, 1989. These interpolations suggest that there was no formation of partnership. The plaintiff firm never asserted its alleged ownership either by applying mutation in the records of Corporation which is must after acquisition of ownership. The story of funding by the aforesaid three persons against the defendant is wholly unbelievable. The payment made by the aforesaid three persons was on account of share of collection of rents and not for otherwise.
13. He submits that the alleged deed of retirement was got to be signed and executed in the police station under threat and coercion held out by the Officer-in-Charge of Hare Street Police Station, Calcutta as the defendant was arrested and brought to the police station. The said document is neither valid nor lawful. Moreover, the plaintiff cannot claim any ownership as there was no conveyance in favour of the plaintiff. It is settled law under the provision of Transfer of Property Act as well as Registration Act execution of conveyance followed by compulsory registration are the legal requirements for passing title in the immovable property. Had there been acquisition of ownership, the plaintiff would have mutated in the records of the Calcutta Municipal Corporation. Therefore, he contends, under no circumstances the plaintiff can be declared to be the owner of the said property. On record, even in the order of the Court as well as in the record of rights of the Calcutta Municipal Corporation, the defendant along with other co-sharers are absolute owners of the property. So, he has every right to claim interest in the said market and he has legitimately asked the tenants not to pay any rent. He, therefore, submits that the suit should be dismissed.
16. Having heard the respective contention of the learned Advocates and considered the materials I think in a suit of this nature in order to obtain relief ownership of the property is not to be provided strictly, it would be suffice to establish lawful right of possession and enjoyment of the property in question. Since the Court framed issues previously on the question of ownership it is necessary to decide this issue first.
17. The plaintiff has claimed its ownership by virtue of the partnership deed being Exhibit 'B'. The defendant, however, denied and disputed legality and validity thereof contending that the document is a sham one and interpolated and at no point of time the said partnership was acted upon. As far as the allegation of interpolation and the document being sham are concerned the same is not at all tenable and it is not accepted at this stage as the defendant has not challenged seriously apart from putting up flimsy defence specifically asking for any relief for cancellation of the document either filing a cross suit or making counterclaim in the instant suit itself. It is now settled position of the law that any kind of relief can be claimed as and by way of counterclaim in a self-same suit subject of course to jurisdiction of a particular Court. In this connection a judgment of the Supreme Court may be referred to. So long the aforesaid partnership deed remains unchallenged and is not cancelled the aforesaid document must be held to be a valid and lawful one. It is true that there are apparent interpolations of the date of execution thereof. Initially the date was mentioned as being 15th September, 1989, thereafter changed as 30th March, 1990 for notarization and then date of 15th September, 1989 restored. In the application for registration date of formation was mentioned as 25th August, 1989. Despite all these wrongful interpolations, one basic fact cannot be overlooked that there was partnership with defendant. These interpolations do not in my view vitiate the deed itself. The partnership deed admittedly has been registered with the Registrar of Firms. So it has got the legal implication under the law. None of the signatories to the said partnership deed, viz., Gopaldas Bagri (defendant), Ghanashyamdas Kankani, Gwaldas Karnani and Mahesh Mimani has disputed their signatures. From the aforesaid Exhibit 'B' being the partnership deed it appears that the partners were having specified and ascertained shares in which the defendant's share was 20%. This exhibit records inter alia that the defendant has brought in the said property in the partnership.
18. Next allegation of the defendant is that the partnership was not acted upon.
19. It appears from evidence and even from written statement that the aforesaid three partners, vis., Ghanashyamdas Kankani, Gwaldas Karnani and Mahesh Mimani had provided funds to enable the defendant to bid in the Court's sale to acquire the said property. The defendant has admitted in his evidence that he had received the said amount to buy up and/or being allotted with the property. The defendant in his answers to question Nos. 370-371 has admitted that he had signed the partnership deed being Exhibit 'B'. The share of the owelty money of the defendant was treated to be his capital. So, his share was ascertained and fixed at 20% of the partnership business. I find on 27th March, 1990 the bank account bearing No. 11125 was opened with the Oriental Bank of Commerce in the name of the partnership firm, viz., 'Broadway Centre' the plaintiff herein. It appears from Exhibit 'U' that the relevant card containing specimen signatures of all the four partners were there. The Exhibit 'W' being the bank account opening form in respect of the aforesaid account has been produced and I do not find any challenge as to the genuineness of the signatures nor the document as above. I find that the said bank account was operated in order to transact the business of the plaintiff firm. The plaintiff firm was also registered on 29th March, 1990 for which necessary application was made and Exhibit 'I' is the original application containing signatures of all the four partners including the defendant. Exhibit 'J' is the money receipt issued by the Registrar of Firms, West Bengal. I do not find any challenge either by suggestion or otherwise as to the correctness of the aforesaid signatures containing in respect of Exhibit 'I'.
20. Therefore, I hold that the said partnership firm of which the defendant was a partner was acted upon. That apart I find from two affidavits, viz. Exhibit 'E' sworn before the Notary Public as well as an affidavit affirmed and filed on 7th July, 1992 in connection with a partition suit being Suit No. 1736 of 1959 wherein the defendant has clearly admitted that he formed a partnership with the other partners under the name and style of the plaintiff.
21. It is the contention of the plaintiff that the defendant had retired from the partnership by executing another deed dated 4th April, 1992 being Exhibit 'D', though the defendant has denied and disputed the validity and legality thereof. I cannot accept the contention of Mr. Tibrewal that the said deed of retirement is Invalid and illegal as the same was caused to be signed in the police station or under threat and/or coercion. Exhibit 'D' is an agreement no doubt. It is not a case of agreement being entered into without consent so as to render it void or void ab initio. It is a case of voidable contract at the highest as it was alleged to have entered into under threat or coercion. Under Section 19 of (the Indian) Contract Act, 1872 the defendant could have avoided it immediately thereafter. I do not find any whisper of avoidance. The defendant rather without doing so accepted benefit thereof receiving a sum of rupees 13 lakhs and odd.
The said deed of retirement being Exhibit 'D' bears and contains the signature of the defendant undisputedly. The defendant in his affidavit sworn before the Notary Public being Exhibit 'E' and another affidavit dated 7th July, 1992 used in the Partition Suit No. 1736 of 1959 being part of the Exhibit 'A' (Document Serial No. 25 of Part-I of Judge's Brief of Documents) has unequivocally and specifically stated that he had entered into partnership with Shri Ghanashyamdas Kankani, Shri Gwaldas Karnani and Shri Mahesh Mimani and he had decided in or about 1991 to leave the partnership. It has been further admitted that the said three partners paid back his contribution to him in three instalments. The aforesaid affidavits were confronted to the defendant in his cross-examination. He has not denied and disputed the legality and validity of the same. No suggestion has been put as to the Illegality and invalidity of the aforesaid two affidavits. He was given a chance to explain but no explanation was put forward retracting from the aforesaid admission. It is settled principle of law as has been rightly argued by Mr. Roy that an admission unless explained furnishes best evidence and since there is no explanation even after opportunity being given this admission in affidavit is conclusive proof of formation of partnership and retirement of defendant as partner from the firm. In support of this proposition I find a decision of the Supreme Court (Ramj Dayawala & Sons (P) Ltd. v. Invest Import). In that case the aforesaid proposition of law has been explained Therefore, I hold that the defendant is estopped from challenging the validity and legality of the said deed of retirement as well as deed of partnership.
22. From the evidence I find that the defendant has duly received an aggregate sum of rupees more than 14 lakhs on account of his retirement which was his deemed capital in the said business. Moreover, I find from income tax returns of the defendant being Exhibits 'M', 'N', 'O' and 'P' which were produced in this Court under subpoena that initially in his return he had shown his interest in the said property as co-owner/co-sharer. Thereafter, he has not shown the said property as a Jointy family property since by that time the property was brought into partnership. So, in his income tax return for the assessment year 1990-91 being Exhibit 'N' he has shown his invested share capital of Rs. 13,70,000/- in the plaintiff firm and subsequently in his Income tax return for the assessment year 1994-95 being Exhibit 'Q' he has not shown his share capital in the plaintiff firm. In his other previous returns being Exhibits 'O' & 'P' he has shown he had relation with the plaintiff firm.
23. By the aforesaid documents it unmistakably establishes irresistible conclusion to the effect that the said property was purchased with the funds of the aforesaid three persons as proved by Exhibit 'G' and ultimately converted into the partnership assets. So, his interest in the partnership as being the share capital was shown in the income tax returns in Exhibits 'N', 'O' and 'P'.
24. Mr. Tibrewal has contended that no conveyance has been executed either by the Court in favour of the defendant or in favour of the partnership firm. Therefore, title of the said property has not passed on. The legal position of the formation of partnership by several persons who are bringing assets to the hotchpotch in the partnership is well settled. Section 14 of the Indian Partnership Act provides as follows :--
"14. The property of the firm.-- Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired by purchase or otherwise, by or for the firm, or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.
Unless the contrary intention appears property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired for the firm."
25. It is an admitted position that the defendant had interest in the said property by virtue of Court's sale and allotment and he had become owner thereof. In terms of the partnership deed he had brought in the said property in the hotchpotch of the partnership. Admittedly the defendant and the other partners at the time of Court's sale supplied necessary consideration amount for acquisition of the said property as and by way of their share capital. The defendant contributed his deemed share capital of his share of owelty money amounting to rupees 12 lakhs and odd and which was adjusted, at the time of Court's sale against full consideration of rupees 61 lakhs. When the partnership has been formed and acted upon by written Instrument by virtue of Section 14 of the said Act. the said property must be assets and property of the plaintiff. In an old decision of this Court rendered in case of Prem Raj v. Bhani Ram reported in ILR (1946) 1 Cal 191 and also a decision of the Patna High Court (Ram Sahay Mall v. Bishwanath Prasad) held that no written or registered document is necessary for an individual to contribute any land or immovable property as contribution against his share of the capital of a new partnership business. Patna High Court held this legal principle relying on the decision of this Court as above and discussing the law of Partnership in this context of U.S.A. and England. So far as mutation in the Municipal record is concerned failure or omission of the same hardly matters under law as it has got no impact on title of the property,
26. Therefore. I hold that the plaintiff is the owner of the said property and accordingly I decide the Issue No. 1 in favour of the plaintiff.
27. As the plaintiff has been able to prove the case of ownership, its exclusive right and enjoyment is always protected by the law, if such enjoyment and possession is invaded and/or threatened to be Invaded by the defendant. I find from the evidence of the plaintiff and even that of the defendant himself, and the stand taken in the written statement the defendant after having retired from the partnership and walked out in receipt of the share capital is still claiming ownership and interest in the said market. I also find from the evidence that defendant has instigated the occupants and/or tenants not to pay any rent who have not paid either. Therefore, this act of the defendant is certainly denial of the plaintiffs exclusive right of enjoyment and possession thereof. The plaintiff is the lawful owner and is entitled to manage and administer its own property without being disturbed and/or interfered with unlawfully by the third party or parties. So, permanent injunction as prayed for must be granted. Therefore, the plaintiff is entitled to and does get decree in terms of prayers (a), (b) and (c) of the plaint.
28. As far as damages are concerned I am of the view going by he averments in the plaint no prima facie case of damage has been made out. The case of the plaintiff in this regard is that because of instigation and/or Interference of the defendant, the tenants have not paid their respective rents. In my view, for this reason the plaintiff has every right to recover rents from the tenants who if not paid due and legitimate rents or deposited with the lawful authority may face legal action that may be brought. However, such alleged loss resultant of non-payment of rent can be remedied by the plaintiff itself by filing appropriate proceedings. Moreover, in the evidence some other case was sought to be made out. I cannot accept such inconsistent and contradictory case of damages against the defendant. Therefore, the relief prayed in terms of prayers (d) and (e) is rejected.
29. The plaintiff is, however, entitled to costs of this suit. Interim order passed in this suit accordingly stands confirmed which shall be merged in the decree. Receiver, if any, appointed in the said property in this suit shall stand discharged accordingly by handing over the property to the plaintiff.