Delhi District Court
Ravi vs Anil on 23 October, 2024
IN THE COURT OF VIKAS GARG, DISTRICT JUDGE-05
(EAST),
KARKARDOOMA COURTS, DELHI.
Civil Suit No. 904/2016
CNR No. DLET01-000582-2010
Sh. Ravi Agrawal
S/o Late Sh. B.L.Agrawal
R/o 176, West Guru Angad Nagar
Laxmi Nagar, Delhi-110092 ...........Plaintiff
Versus
1. Sh. Anil Jagota
S/o Mangat Ram Jagota
R/o H. No. 11/13, 3rd Floor,
Geeta Colony, Delhi-110031
2. Sh. Rajnish Jagota
S/o Sh. Mangat Ram Jagota
Officer Jagota's Company
Chartered Accountant
Room No. 301, Bharti Chambers,
Vikas Puri, Delhi-110018
3. Sh. Atul Agarwal
S/o Late Sh. B.L.Agrawal
R/o 176, West Guru Angad Nagar
Laxmi Nagar, Delhi-110092
4. Smt. Sushma Jagota
W/o Anil Jagota
R/o H. No. 11/13, 3rd Floor
Geeta Colony, Delhi-110092 ...........Defendants
Date of Institution : 01.07.2010
Date of Final arguments : 20.08.2024
Date of Decision : 23.10.2024
Final Decision : Suit Dismissed
VIKAS Digitally signed
by VIKAS GARG
GARG Date: 2024.10.23
15:45:48 +0530
CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 1 of 47
SUIT FOR SPECIFIC PERFORMANCE, DECLARATION,
CANCELLATION OF DOCUMENTS, PROHIBITORY AND
MANDATORY INJUNCTIONS AND RECOVERY OF
MONEY.
JUDGMENT
1. This judgment will adjudicate the plaintiff's suit for specific performance, declaration, cancellation of documents, prohibitory and mandatory injunctions, as well as the recovery of money.
CASE OF THE PLAINTIFFS AS PER PLAINT :
2. Briefly, the essential facts required for a fair adjudication of the present suit, as presented in the plaint, are as follows:
The suit concerns a partnership dispute in "The Plywood Traders," established through a Partnership Deed dated 23-04- 1996, located at Shop No. 7, Main Road West Guru Angad Nagar, Delhi. While Defendant No. 1 controlled all business operations and finances, the Plaintiff's role was restricted to supervising field work. In 2000, disputes led to a mediation settlement by Shri Virendra Taneja dated 11-06-2000, which provided for the sale of property No. 266, West Guru Angad Nagar (measuring 64 sq. yards). This property was subsequently sold to Sh. Mahavir Prasad Aggarwal for Rs. 11,50,000/- on 14.06.2000, with proceeds meant to be distributed among creditors, and the Plaintiff's share fixed at Rs. 6.25 lakhs, which remains unpaid. VIKAS Digitally signed by VIKAS GARG Date: GARG 2024.10.23 15:46:02 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 2 of 47 The settlement also provided for physical partition of shop premises, but Defendant No. 1 allegedly manipulated the agreement by interchanging Portions A and B during document execution (registered on 14.06.2000), depriving the Plaintiff of both the advantageous middle position adjacent to his family's existing shop and the agreed compensation of Rs. 1,50,000. The matter has undergone various legal proceedings, including Arbitration Application No. 120/2001, execution proceedings, and multiple suits. The trial balance ending March 31, 1999, shows closing stock of Rs. 5,03,319.67. The cause of action arose on various dates, lastly on 25.06.2010, and continues to be recurring. The suit has been properly valued with prescribed court fees paid, including ad-valorem court fees and additional fees for injunctive reliefs.
The Plaintiff prayed in the following terms:
(a) To pass a decree for declaration that the disputes between the parties stood settled by the mutual consent with the assistance of mediator Shri Virendra Taneja vide minutes of settlement in writing dated 1.6.2000 & 11.6.2000 and binding upon the parties.
(b) To pass a decree of specific performance of the said mutual settlement arrived with the consent of both parties, with the assistance of mediator Shri Virendra Taneja vide minutes of settlement in writing dated 1-6-2000 & 11-6-2000;
(c) For a decree of declaration that the defendant No.1 acted illegally, malafide, and by wrongful manipulation in defendant's favour by interchanged the portions marked "A" and "B" of the VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:46:13 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 3 of 47 said settlement at the time of drawing up the consequential agreement to sell and GPA both dated 14-6-2000 in favour of brother of the plaintiff and wife of the defendant No.1 respectively are null and void;
(d) For a decree of cancellation of the agreement to sell and GPA both dated 14-6-2000 (registered before the Sub-Registrar, Seelampur on 14-6- 2000) in favour of brother of plaintiff (proposed defendant no.3) and wife of defendant no.1 (proposed defendant no.4) respectively prepared by treating the said brother and wife to be the nominees of the plaintiff and defendant No.1 respectively so as to give effect to the settlement arrived between the plaintiff and defendant as per their mutual consent with the assistance of mediator Shri Virendra Taneja vide minutes of settlement in writing dated 1-6-2000 & 11-6-2000;
(e) For a decree of dissolution of the firm "The Plywood Traders"
which had been created by deed of partnership dated 23-4-1996, with direction for closure of the firm and intimation to be sent to the Registrar of firms regarding dissolution of the said firm which had closed down business activities since March April 2000;
(f) For a mandatory injunction and/or other appropriate direction requiring the defendant who was having control over the entire running of the said firm including finances, to make payment and/or obtain no due certificate/clearance from the Income Tax Department, Sales Tax Department and any other Department as VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:46:22 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 4 of 47 required by law; and to return back the original blank signed papers of the plaintiff which had been taken for assessment purposes whether the said blank signed papers be in the custody of Defendant No.1/ Defendant No.2 & 4;
(g) For a money decree to be passed in favour of the plaintiff and against the defendant No.1 for the sum of Rs. 6,25,000/ (Rupees Six lakhs and twenty five thousand only) as the plaintiff's share of sale of "Plot No. 266, West Guru Angad Nagar, Delhi -92 as per mediation settlement dated 1.6.2000 and 11.06.2000 with interest thereon @ 12% p.a. till realization;
(h) For a decree of permanent injunction restraining the defendant his employees, agents etc from selling, transferring and/or alienating and/or creating third party interest in the stocks lying at defendant's shop at 7 West Guru Angad Nagar, Delhi -92 and Godown at 454-455, Gali No. 13, West Guru Angad Nagar, Delhi-92, or at any other location of the defendant to the extent of 50% of the amount equivalent to the stocks of the partnership firm "The Plywood Traders" as reflected in the properly maintained books of the firm and confirmed by the Sales Tax record of opening balance and closing balance of stock in hand of the firm amounting to Rs. 6 lakhs approx.
I) The defendant be restrained by permanent injunction from disturbing in any manner or causing any obstruction whether by way of parking any vehicles or placing any goods or in any other manner whatsoever to the peaceful conducting of business in the VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:46:30 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 5 of 47 middle shop belonging to plaintiff's brother and also the extreme right hand side family shop of the plaintiff towards and touching the wall of the property being Shop No. 5 belonging to one Shri S. Sahni.
(J) Any other or further relief which this Hon'ble Court deems fit and proper in the facts and circumstances of the present case may also be passed.
CASE OF THE DEFENDANT No. 1 AS PER WRITTEN STATEMENT:
3. Briefly, the essential facts required for a fair adjudication of the present suit, as presented in the Written Statement, are as follows:
The Defendant states that the present suit is not maintainable as the Plaintiff, having failed to obtain relief in Suit No. 499/2001 before the District Judge, Delhi and Execution Petition No. 45/2006 before the High Court, has now filed this suit with factually incorrect allegations and inconsistent pleadings. The suit is barred by limitation, particularly regarding the cancellation of documents executed in 2000, which cannot be challenged after the withdrawal of Suit No. 499/2000 in 2004. The Defendant highlights that the Plaintiff has given contradictory versions at different times regarding the same set of title documents executed on 14.6.2000, demonstrating the falsity of the current claims. Furthermore, the Division Bench's order dated 18.5.2009 offers no relief from limitation as this issue was left open. The pleas in the current plaint contradict the Plaintiff's earlier stands in VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:46:41 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 6 of 47 various proceedings, the suit is incorrectly valued with deficient court fees under the Court Fees Act and Suit Valuation Act, and the reliefs sought for declaration and specific performance are not maintainable under the Specific Relief Act. Additionally, the Defendant argues that no cause of action exists in favor of the Plaintiff for the reliefs claimed.
The partnership between the Plaintiff and Defendant No. 1 was dissolved in June 2000 through a mutual settlement. However, the Defendant vehemently denies the Plaintiff's allegations regarding the management and control of the partnership during its subsistence. The Defendant asserts that both partners had equal authority and participation in all business matters, including profit sharing, management, and sale/purchase decisions. The Defendant specifically refutes claims that Defendant No. 1 had exclusive control over stocks, accounts, or business operations, stating that the account books were actually maintained by an accountant known to the Plaintiff.
Regarding the dissolution settlement of June 2000, the Defendant provides a detailed chronological account of events, starting with the partnership's formation in April 1996 and the subsequent purchase of three adjoining shops. When disputes arose in March 2000, the parties agreed to mediation by Mr. Virender Taneja, leading to a written settlement on June 11, 2000. The Defendant explains that while initial settlement terms were documented, the parties subsequently modified their agreement regarding the division of shop premises. Instead of following the original rough sketch, they mutually agreed to a different arrangement where the VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:46:49 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 7 of 47 Plaintiff received the corner portion (marked as "A") and Defendant No. 1 retained portion "B," with the properties being transferred to their respective nominees (Defendant No. 3 and Defendant No. 4). This arrangement included a payment of Rs. 75,000 from the Plaintiff to Defendant No. 1.
The Defendant further details the implementation of the settlement, including the sale of Plot No. 256 West Angad Nagar for Rs. 11.50 Lacs, the distribution of proceeds to various creditors, and the equal division of the remaining Rs. 5.40 Lacs between the parties. The Defendant emphasizes that all actions were properly documented through sale agreements, power of attorney documents, and mutual agreements regarding utilities. The Defendant contests the Plaintiff's claims about not receiving settlement documents or sale proceeds, characterizing these allegations as afterthoughts and noting that the Plaintiff's previous lawsuit regarding these matters was withdrawn. The Defendant maintains that both parties have been operating their respective businesses from their agreed-upon portions since June 2000, demonstrating the implementation and acceptance of the settlement terms.
In response to paragraphs 11-16, it is categorically denied that any terms of the settlement dated 11.6.2000 remain unimplemented. All obligations under the settlement, along with the subsequent agreement for division and sale of shop premises as documented on 14.6.2000, have been fully discharged, leaving no outstanding obligations for Defendant No. 1. The Plaintiff's claims regarding compensation of Rs. 1.50 lacs, money decree of VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:46:59 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 8 of 47 Rs. 6 Lacs, and 50% share of stocks with interest are entirely denied and deemed baseless. The Plaintiff's attempts to derive benefits from the suit for cancellation of documents (filed in 2001) and the arbitration petition in the High Court are inappropriate, as these proceedings were initiated by concealing the fact that all partnership disputes were resolved in June 2000.
The Division Bench's order does not confer any new rights to the Plaintiff, as it did not examine the factual matrix of the case, and the execution petition was subsequently dismissed.
Regarding paragraphs 17-20, the Plaintiff has failed to provide copies of the plaints filed in the two suits mentioned. The liberty granted in the suits withdrawn in 2009-2010 does not create any new rights or cause of action for the Plaintiff, as all partnership matters were previously resolved. The sale documents in question were executed pursuant to the mutual agreement reached between the parties immediately following the settlement recorded by Mr. Virender Taneja on 11.6.2000. In accordance with these documents, both parties have occupied their respective portions of the shop premises and have been conducting their separate businesses under different names since June 2000.
Regarding paragraphs 21-27, the Defendant vehemently denies all allegations as false. The sale proceeds of Property No. 266 were properly distributed among creditors, with Rs. 5.40 Lacs equally divided between the Plaintiff and Defendant No. 1 in the presence of witnesses. The stock details in Annexure L are disputed as inauthentic and vague, as the stocks were physically VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:47:07 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 9 of 47 distributed equally between parties in June 2000, valued between 5-6 Lacs, as confirmed by affidavits filed in execution petition No. 45/20006. Post-settlement in June 2000, the partnership firm Plywood Traders stood dissolved, with both parties operating separate businesses under different names (Aggarwal Plywood Traders and Jagota Plywood Traders) from their respective premises. The trial balance as of 31.3.1999 is contested as inauthentic and does not reflect the true position of stock at the time of settlement.
Concerning paragraphs 28-33, the Defendant denies any pending liabilities regarding tax, trade debts, interest, or penalties, as the partnership was dissolved in June 2000. It is categorically denied that Defendant No. 2 was appointed as CA of the partnership business or that any blank signed papers were ever given by the Plaintiff. The Defendant refutes claims of fraudulent manipulation of shop premises in the sale documents signed on 14.6.2000, asserting that all parties signed with clear knowledge of the contents. The Defendant maintains there is no cause of action for any matter in the present suit, noting the Plaintiff's failure to specify dates regarding the accrual of cause of action for different reliefs claimed.
Pertaining to paragraphs 34-38 and the conclusion, the Defendant challenges the suit's valuation for court fees and jurisdiction as erroneous and deficient. The question of the Plaintiff's readiness is deemed irrelevant since all partnership disputes were settled and implemented in 2000. The Defendant strongly denies any VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:47:15 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 10 of 47 entitlement to specific performance or compensation claims, asserting that no legal basis exists for such relief as the settlement was fully implemented in 2000. Given these submissions, the Defendant requests dismissal of the suit with exemplary costs, characterizing the litigation as unnecessary and motivated by ill intention.
CASE OF THE DEFENDANT No. 2 AS PER WRITTEN STATEMENT:
4. Briefly, the essential facts required for a fair adjudication of the present suit, as presented in the Written Statement, are as follows:
Defendant No. 2 submits that no cause of action has arisen against them in relation to the subject matter of the present suit. The disputes pertain solely to the business dealings between the Plaintiff and Defendant No. 1, and Defendant No. 2 was never a party to these disputes or the partnership business in question. The allegations made in the plaint are categorically denied as false and incorrect, and on this basis, the suit lacks a cause of action against Defendant No. 2, warranting its dismissal on this ground alone.
Furthermore, without prejudice to the above, it is submitted that the suit against Defendant No. 2 is also barred by limitation. The disputes between the Plaintiff and Defendant No. 1 were settled in June 2000, and the settlement dated 11.6.2000 makes no mention of any alleged blank signed papers given to Defendant VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:47:24 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 11 of 47 No. 2. The relief claimed against Defendant No. 2, as outlined in Clause-(f) of the prayer clause, does not arise from the terms of the settlement or any other matter related to the partnership business. Additionally, the plaint fails to specify when the cause of action arose against Defendant No. 2. Given that the settlement between the Plaintiff and Defendant No. 1 fully resolved all issues in 2000, and no allegations were raised by the Plaintiff between 2000 and 2010 regarding any matters such as tax clearances or the return of blank signed papers, the suit is barred by limitation. Therefore, it is liable to be dismissed on this ground as well.
Defendant No. 2 submits that the present suit lacks any cause of action against him, as the disputes mentioned in the plaint solely concern the partnership business between the Plaintiff and Defendant No. 1. It is categorically denied that any dispute arose between the Plaintiff and Defendant No. 2, and no involvement of Defendant No. 2 in the partnership business of "The Plywood Traders" is admitted. The settlement reached between the Plaintiff and Defendant No. 1 on June 11, 2000, did not involve Defendant No. 2 or contain any mention of the alleged blank signed papers. Moreover, Defendant No. 2 asserts that at no point were such papers handed to or taken by him, and the Plaintiff's claim for mandatory injunction against Defendant No. 2 is entirely baseless. The plaint fails to specify any time or date of accrual of cause of action against Defendant No. 2, and the suit is thus liable to be dismissed for lack of cause of action. The Plaintiff's claims are further barred by limitation, as any dispute, VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:47:33 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 12 of 47 if at all, would have arisen in 2000 when the settlement was concluded. Defendant No. 2 also asserts that the Plaintiff has erroneously valued the reliefs and affixed deficient court fees. It is clear that Defendant No. 2, who has his own separate professional practice, has been unnecessarily dragged into this litigation with ill intent. Therefore, Defendant No. 2 requests this Hon'ble Court to dismiss the suit with exemplary costs, as no relief has been sought or can be justified against him.
CASE OF THE DEFENDANT No. 4 AS PER WRITTEN STATEMENT:
5. Briefly, the essential facts required for a fair adjudication of the present suit, as presented in the Written Statement, are as follows:
Defendant No. 4 submits that there is no cause of action against him in the present suit, as the disputes arose solely between the Plaintiff and Defendant No. 1 concerning their partnership business, and Defendant No. 4 was never involved in those matters. The suit against Defendant No. 4 is therefore liable to be dismissed for lack of cause of action. Additionally, the suit is barred by limitation, as the disputes were settled in June 2000, and the Plaintiff now seeks cancellation of documents voluntarily signed on 14.6.2000. Defendant No. 4's involvement was limited to the execution of sale documents for shop premises, jointly owned by the Plaintiff and Defendant No. 1, and had no other connection to their business disputes. Furthermore, the Plaintiff's claims are inconsistent with those made in a prior suit (Suit No. VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:47:43 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 13 of 47 499/2000), where the same sale documents were challenged, demonstrating the falsity of the Plaintiff's case. The Plaintiff's appeal was also dismissed by the Hon'ble High Court, with no ruling favoring the Plaintiff on limitation grounds. Moreover, the Plaintiff's contradictory positions in previous legal proceedings further weaken his case. The suit is improperly valued under the Court Fee Act and Suit Valuation Act, with the Plaintiff failing to pay the requisite court fees. Lastly, the suit for declaration and specific performance is not maintainable under the Specific Relief Act. Therefore, the suit is liable to be dismissed on these grounds.
The contents of paragraphs 1 and 3 do not pertain to the answering Defendant. In response to para 4, it is submitted that the Plaintiff himself has admitted that Defendant No. 4 is not involved in the disputes with Defendant No. 1. However, the Plaintiff cannot seek cancellation of the sale documents dated 14.6.2000, which were signed jointly by the Plaintiff and Defendant No. 1 under a mutual agreement reached in June 2000.
The contents of paras 5 and 6 are denied as incorrect. It is specifically denied that Defendant No. 1 played any trick by interchanging portions "A" and "B" of the shop premises. The Plaintiff's claims are false, as the sale documents were executed with full understanding and knowledge, without any ambiguity, concerning the agreed-upon division of the shop premises. The portions of the shop were described in the site plan annexed to the General Power of Attorney dated 14.6.2000, and the documents were executed jointly by the Plaintiff and Defendant VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:47:53 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 14 of 47 No. 1 in favor of Defendants No. 3 and 4. The allegations in paras 5 and 6 contradict the Plaintiff's previous claims in Suit No. 499/2001, which was withdrawn in 2004. The Plaintiff cannot challenge the same documents again on new grounds years later. The contents of para 7 do not pertain to the answering Defendant. In reply to paras 8 and 9, it is submitted that the sale documents were executed in 2000, and the Plaintiff and Defendant No. 1 have been operating businesses from the respective shop portions since then. There was no manipulation of shop portions by Defendant No. 1, and the Plaintiff is bound by the consequences of withdrawing his previous suit in 2004. The contents of para 10 do not pertain to the answering Defendant. Regarding para 11, the Plaintiff is not entitled to any decree for correcting or reversing the alleged manipulation of the shop portions. The shops have been occupied by the Plaintiff and Defendant No. 1 since June 2000, based on the mutual agreement and sale documents signed on 14.6.2000. There was no manipulation by Defendant No. 1, and the Plaintiff cannot now challenge these documents. The contents of para 12 are denied, and it is reiterated that the Plaintiff is barred from seeking cancellation of the documents executed in 2000. The shop portions were divided as per the site plan in the registered General Power of Attorney, and the Plaintiff cannot now claim division based on an old sketch. In reply to para 13, the Plaintiff is not entitled to any benefit for the time spent pursuing a previous suit, which was withdrawn. The contents of para 14 are matters of record, but it is submitted that the 2001 suit for cancellation of documents was frivolous. Paras 15 and 16 do not pertain to the answering Defendant. Regarding VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:48:03 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 15 of 47 paras 17-18, the Plaintiff has not filed copies of the plaint in previous suits. The Plaintiff cannot now seek the reliefs claimed, as no fresh rights have been conferred on him. The contents of paras 19 and 20 are matters of record, but it is reiterated that the Plaintiff and Defendant No. 1 have been occupying the shop portions as per the documents signed in 2000, and there was no manipulation. The contents of paras 21-23A do not pertain to the answering Defendant. In reply to para 24, the Plaintiff has no basis for seeking any decree contrary to the sale documents signed in 2000. Paras 25-30 do not call for any reply from the answering Defendant. The contents of paras 31 and 32 are vehemently denied. There was no fraudulent manipulation of the shop portions by Defendant No. 1, and the Plaintiff is not entitled to any cancellation or rectification of the documents. The Plaintiff is also not entitled to any decree of permanent injunction. In reply to para 33, it is denied that the Plaintiff has any cause of action in this suit, and no relevant dates are mentioned in the para to support such a claim. The suit is liable to be dismissed for lack of cause of action. The contents of paras 34-35 are denied, as the valuation of the suit and court fees is erroneous and deficient. The contents of para 36 are denied, and it is submitted that the Plaintiff's willingness to perform his part of the settlement is irrelevant, as the settlement was fully implemented in 2000. The contents of para 37 are denied, and the Plaintiff is not entitled to specific performance or compensation. The contents of para 38 are denied, as no legal impediment exists to prevent the dismissal of this suit, which lacks any merit. In conclusion, the Plaintiff is not entitled to any relief, and the suit VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:48:11 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 16 of 47 should be dismissed with exemplary costs for unnecessarily dragging the answering Defendant into this litigation.
6. Defendant No. 3 never participated in the legal proceedings and was accordingly proceeded ex-parte by the court vide its order dated 25.03.2001.
ISSUES:
7. On the basis of pleadings of the parties, following issues have been framed on 15.12.2015 for trial :-
1.Whether the suit of the plaintiff is without Limitation? Onus on both the parties.
2.Whether the plaintiff has cause of action to file the present suit? OPD
3. Whether the plaintiff is entitled for decree of dissolution of the firm "The Plywood Traders" as per prayer clause 38 (e)? OPP
4. Whether the plaintiff is entitled for decree of declaration as per prayer clause 38 (a)? OPP
5. Whether the plaintiff is entitled for decree of declaration as per prayer clause 38 (b)? OPP
6. Whether the plaintiff is entitled for decree of declaration as per prayer clause 38 (c)? OPP
7. Whether the plaintiff is entitled for decree of declaration as per prayer clause 38 (d)? OPP
8. Whether the plaintiff is entitled for decree of declaration as per prayer clause 38 (f)? OPP VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:48:20 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 17 of 47
9. Whether the plaintiff is entitled for decree of declaration as per prayer clause 38 (g)? OPP
10. Whether the plaintiff is entitled for decree of declaration as per prayer clause 38 (h)? OPP
11. Whether the suit has been properly valued for the purposes of court fees and jurisdiction with respect to the reliefs claimed by the plaintiff? OPD
12. Relief.
8. Pursuant to the Court's order dated 15.12.2015, the matter was listed for advancing arguments on preliminary Issues No. 1 and 3.
ARGUMENTS ON PRELIMINARY ISSUES:
9. Arguments on Behalf of the Plaintiff:
Learned Counsel for the plaintiff primarily argued in line with the plaint, reading several portions of it along with accompanying documents. On the issue of the partnership firm's dissolution, he contended that the firm has not been dissolved. He directed the court's attention to paragraph 23 of the plaint, which mentions that the plaintiff received various notices from the Taxation Department, including those for the years 2004-2005. Relying on this, he argued that the firm is still operational in accordance with the Mediation settlement.
Further, the Learned Counsel asserted that the plaintiff is entitled to the exclusion of time spent litigating various proceedings between the plaintiff and the defendant. Digitally signed VIKAS by VIKAS GARG Date:
GARG 2024.10.23
15:48:29 +0530
CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 18 of 47
He also highlighted the Hon'ble Delhi High Court's order dated 18.05.2009, related to the appeal against the execution petition, specifically pointing to paragraphs 10 and 11. According to him, this order extended the period of limitation.
Arguments on Behalf of Defendants No. 1, 2, and 4:
The Ld. Counsel for Defendants No. 1, 2, and 4 has contended that the plaintiff's claim for the dissolution of the partnership firm, "The Plywood Trader," as sought in prayer clause 38(e) of the plaint, is not maintainable. The firm was admitted to have dissolved on 11.06.2000, as acknowledged by both the plaintiff and Defendant No. 1 in a joint statement before the court on 2.05.2014 and during mediation proceedings on 9.12.2013. The plaintiff has not contested awareness of the settlement dated 11.06.2000, further confirming the dissolution. The court proceedings and mediator's records clearly reflect that the firm had ceased to exist after the dissolution, and any subsequent issues raised in the suit pertain to the settlement of accounts and liabilities, not the dissolution itself.
It is argued that under Section 40 of the Indian Partnership Act, a firm can be dissolved by mutual consent, and there is no legal requirement to seek the Registrar's approval for dissolution. The counsel emphasized that dissolution and settlement of accounts are distinct processes, the latter taking place post-dissolution, as per Section 48 of the Act. Since the dissolution occurred in 2000 and was admitted in court, the plaintiff's current relief for VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:48:39 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 19 of 47 dissolution in 2010 is redundant and barred by law. Citing Order 14 Rule 2(2), the counsel urged that the court can decide this legal issue as a preliminary matter, dismissing the suit's claim for dissolution and proceeding only on unresolved factual issues.
The defendants argue that the plaintiff's suit is grossly barred by limitation for various reliefs claimed, rendering the suit liable for dismissal. For reliefs related to the declaration and specific performance of the settlement dated 11.06.2000 (para 38(a) and
(b)), the cause of action arose on the date of the settlement itself, and the limitation period expired by June 2003. Despite this, the plaintiff pursued incorrect legal remedies, concealing the existence of the settlement, and thus cannot benefit from any extension of the limitation period. The reliefs sought for cancellation of sale documents executed on 14.06.2000 (para 38(c) and (d)) are similarly time-barred. The plaintiff withdrew an earlier suit in 2004 with liberty to file afresh but failed to do so within the limitation period, which expired in 2003, making the present claims beyond the statutory period.
Additionally, the mandatory injunction (para 38(f)) and money decree (para 38(g)) sought are also barred by time as they pertain to events from 2000, with no fresh cause of action alleged by the plaintiff. Further, the claims for permanent injunction regarding stocks and business obstruction (para 38(h) and (i)) are time- barred, as they relate to matters covered in the settlement dated 11.06.2000, which the plaintiff failed to enforce within the limitation period. In light of the plaintiff's concealment of the VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:48:47 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 20 of 47 settlement and pursuit of incorrect remedies, the suit is not maintainable as it has been filed well beyond the permissible time limits under the Limitation Act.
10. I have carefully heard the rival contentions presented by both parties, thoroughly examined the case record, and given due consideration to the relevant legal provisions and established legal precedents.
ISSUE-WISE FINDINGS (PRELIMINARY ISSUES):
11. There are two preliminary issues: Issue No. 1 and Issue No. 3. The court will address Issue No. 3 first, followed by Issue No. 1.
ISSUE NO. 3:
3. Whether the plaintiff is entitled for decree of dissolution of the firm "The Plywood Traders" as per prayer clause 38
(e)? OPP The wording of Clause 38(e) is as follows:
"(e) for a decree of dissolution of the firm "The plywood Traders" which has been created by deed of partnership dated 23.04.1996, with direction for clause of the firm and intimation to be sent to the registrar of firms regarding dissolution of the said firm which had closed down business activities since March 2000."
The plaintiff asserts that the partnership firm has yet to be VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:48:58 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 21 of 47 dissolved, as he has prayed for its dissolution. In contrast, the defendants argue that the firm has already been dissolved.
Chapter VI of the Partnership Act, 1932, governs the dissolution of a firm. Section 39 defines the "dissolution of a firm" as the dissolution of the partnership between all partners. Sections 40 to 44 outline the various modes of dissolution, while Sections 45 to 55 detail the consequences of such dissolution, including the settlement of accounts and division of assets. Notably, the dissolution must occur first, followed by these consequential actions. Section 40 to 44 of the Partnership Act, 1932, which are relevant here, are reproduced below:
40. Dissolution by agreement.-- A firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners.
41. Compulsory dissolution.-- A firm is dissolved,
(a) by the adjudication of all the partners or of all the partners but one as insolvent, or
(b) by the happening of any event which makes it unlawful for the business of the firm to be carried on or for the partners to carry it on in partnership:
Provided that, where more than one separate adventure or undertaking is carried on by the firm the illegality of one or more shall not of itself cause the dissolution of the firm in respect of its lawful adventures and undertakings.
42. Dissolution on the happening of certain contingencies.
-- Subject to contract between the partners a firm is dissolved,
(a) if constituted for a fixed term, by the expiry of that term;
(b) if constituted to carry out one or more adventures or Digitally signed undertakings, by the completion thereof; VIKAS by VIKAS GARG Date:
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(c) by the death of a partner; and
(d) by the adjudication of a partner as an insolvent.
43. Dissolution by notice of partnership at will.--(1) Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm.
(2) The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is so mentioned, as from the date of the communication of the notice.
44. Dissolution by the Court.-- At the suit of a partner, the Court may dissolve a firm on any of the following grounds, namely:--
(a) that a partner has become of unsound mind, in which case the suit may be brought as well by the next friend of the partner who has become of unsound mind as by any other partner;
(b) that a partner, other than the partner suing, has become in any way permanently incapable of performing his duties as partner;
(c) that a partner, other than the partner suing, is guilty of conduct which is likely to affect prejudicially the carrying on of the business, regard being had to the nature of the business;
(d) that a partner, other than the partner suing, wilfully or persistently commits breach of agreements relating to the management of the affairs of the firm or the conduct of its business, or otherwise so conducts himself in matters relating to the business that it is not reasonably practicable for the other partners to carry on the business in partnership with him;Digitally signed
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(e) that a partner, other than the partner suing, has in any way transferred the whole of his interest in the firm to a third party, or has allowed his share to be charged under the provisions of rule 49 of Order XXI of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) or has allowed it to be sold in the recovery of arrears of land revenue or of any dues recoverable as arrears of land revenue due by the partner;
(f) that the business of the firm cannot be carried on save at a loss; or
(g) on any other ground which renders it just and equitable that the firm should be dissolved.
In the present case, the partnership deed dated 23.04.1996 establishes no fixed duration for the partnership, classifying it as a partnership at will under Section 7 of the Indian Partnership Act. According to Section 43 of the Act, a partnership at will can be dissolved by any partner through written notice to all other partners, indicating their intention to dissolve the firm. Consequently, court intervention is unnecessary when a partnership is at will.
The preliminary Issue No. 3 concerns whether the plaintiff is entitled to a decree of dissolution. The defendant contends that the firm has already been dissolved, making the plaintiff's prayer in Clause 38(e) meaningless. Conversely, the plaintiff asserts that the firm has not been dissolved. In the background of these opposing claims, Issue No. 3 must be addressed as a preliminary issue.
Digitally signed VIKAS by VIKAS GARG
Date:
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At this stage it is relevant to refer to the decision of Hon'ble Allahabad High Court in a case titled as Baijnath v. Chhote Lal, (1928) 26 All LJ 243, wherein the Hon'ble High Court held that the cessation of a firm's business, along with surrounding circumstances, may lead to the inference that the firm has been dissolved.
Similarly, in Harish Kumar v. Bachan Lal, AIR 1991 P&H 130 (DB), the Hon'ble Punjab & Haryana High Court observed that a partnership at will stands dissolved from the date the partners decide to cease business. Any subsequent notice of dissolution by one partner is inconsequential.
In the present case, as per the plaint and documents filed and relied upon by the plaintiff, disputes arose between the partners of the firm in 2000, leading to the cessation of partnership activities. Subsequently, settlement terms were agreed upon during mediation, resulting in a mediation settlement dated 11.06.2000. A copy of the settlement dated 11.06.2000 was filed along with the plaint. The heading of the settlement reads:
"Agreement of Partition/Dissolution of The Plywood Traders, Patparganj Road, Opposite Radhu Palace, Delhi-92."
The plaintiff states that this settlement was acted upon, including the sale of the firm's property, Property No. 266, West Guru Angad Nagar, Delhi, with the proceeds distributed among various creditors. According to the plaintiff, he was entitled to receive his Digitally signed VIKAS by VIKAS GARG Date: GARG 2024.10.23 15:49:52 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 25 of 47 share of Rs. 6.25 lakhs from the remaining amount, as per the mediation settlement.
The sequence of events indicates that the firm had been dissolved first, followed by the consequences of dissolution. If there had been no dissolution, the sale of the property and distribution of proceeds among creditors could not have occurred, nor would the plaintiff have been entitled to his share. Additionally, the plaintiff asserts that the physical partition of the firm's business premises (shop) was to be carried out by transferring each partner's portion to their respective nominees -- the plaintiff's brother and the wife of defendant No. 1. The plaintiff claims that documents, including a GPA, agreement to sell, and a will, all dated 14.06.2000, were executed in pursuance of the mediation settlement. However, the defendant allegedly manipulated the situation by transferring the non-agreed portion to his wife and the plaintiff's brother.
It is evident that these documents were prepared solely to effectuate the dissolution of the partnership. The sale, transfer of properties, and preparation of documents were direct consequences of the firm's dissolution. Any alleged manipulation by the defendant in executing the settlement terms dated 11.06.2000 is a separate issue. It is difficult to conceive how the main business premises could be divided or partitioned without the dissolution of the partnership firm.
Digitally signed VIKAS by VIKAS GARG
Date:
GARG 2024.10.23
15:50:03 +0530
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In the present case, the cessation of business, along with circumstances such as the sale and transfer of property and the preparation of related documents, leads to the irresistible conclusion that the partnership firm had already been dissolved between the parties. To further clarify this point, it is relevant to refer to Article 5 of the Schedule appended to the Limitation Act, 1963, which is reproduced below:
5. For an account and a Three years The date of the share of the profits of a dissolution dissolved partnership A perusal of that article strengthens the conclusion drawn from the above discussion: that the dissolution of the partnership must occur first, followed by the process of settling accounts and profits. In the present case, this sequence was followed, with the dissolution taking place first and then the settlement process beginning.
At this juncture, it is pertinent to refer to the joint statement made by the plaintiff and defendant No. 1 before the court on 02.05.2014, which bears the signatures of both parties. The statement is reproduced below:
"we are the plaintiff and defendant no. 1 in the present suit. Despite best efforts, we have been unable to get any specific details of the income tax and sales tax liabilities in respect of the partnership under the name and style of The Plywood Traders which stood dissolved on 11.06.2000. However, any liability arising towards sales tax or incomeDigitally tax signed in by VIKAS VIKAS GARG GARG Date: 2024.10.23 15:50:12 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 27 of 47 respect of the said firm for the period up to the dissolution will be jointly borne by us in equal share."
Learned counsel for defendants No. 1, 3, and 4 heavily relied on the joint statement, where it was recorded that the firm was dissolved on 11.06.2000. However, learned counsel for the plaintiff contended that this statement cannot be relied upon, as it was made by the parties solely for the purpose of tax filing and to avoid tax penalties.
Even if this statement, which explicitly acknowledges the dissolution of the firm on 11.06.2000, is disregarded, the surrounding events, including the sale of property and other actions, still indicate that the firm had already been dissolved.
Learned counsel for the plaintiff also contended that various notices, including those from the years 2004-2005, were received by the plaintiff from the Sales Tax Department, suggesting that the partnership firm was still operational. However, there is no merit in this argument. If a partnership firm is dissolved without settling all tax dues or before the due date for tax payment or filing returns, it does not imply that the tax liability of each partner ends upon dissolution. In a partnership, each partner's liability is personal, and it continues despite the dissolution of the firm.
The plaintiff has not clearly stated whether the tax liability pertains to business conducted before or after 11.06.2000. Even if VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:50:20 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 28 of 47 these notices are related to business activities post-11.06.2000, it does not necessarily imply that the firm remained undissolved. If the defendant engaged in any transactions under the name of the partnership firm, the plaintiff has the right to take appropriate legal action or file a representation before the competent authority.
From the above discussion, it is evident that, based on the contents of the plaint and the documents submitted with it, the only reasonable conclusion is that the partnership firm was dissolved on 11.06.2000. No other conclusion can be drawn. Given the facts and circumstances of this case, no further evidence is required, as pursuing additional evidence would be an exercise in futility.
In the present case, the partnership was at will and stood dissolved by the mutual consent of the parties through the mediation settlement dated 11.06.2000. Since the firm has already been dissolved, no decree of dissolution can be passed.
As far as the direction to the registrar is concerned, Section 63 of the Partnership Act is relevant and is reproduced below:
"63. Recording of changes in and dissolution of a firm.-(1) When a change occurs in the constitution of a registered firm any incoming, continuing or outgoing partner, and when a registered firm is dissolved any person who was a partner immediately before the dissolution, or the agent of any such partner or person specially authorized in this behalf, may give notice to the Registrar of such change or VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:50:29 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 29 of 47 dissolution, specifying the date thereof; and the Registrar shall make a record of the notice in the entry relating to the firm in the Registrar of Firms, and shall file the notice along with the statement relating to the firm filed under section 59.
Recording of withdrawal of a minor.- (2) when a minor who has been admitted to the benefits of partnership in a firm attains majority and elects to become or not to become a partner, and the firm is then a registered firm, he, or his agent specially authorized in this behalf, may give notice to the Registrar that he has or has not become a partner, and the Registrar shall deal with the notice in the manner provided in sub-section (1)."
A perusal of the said provision makes it clear that upon the dissolution of a firm, any person who was a partner prior to the dissolution, or an agent of such partners, or any person specifically authorized, can inform the registrar. Therefore, no action is required on the part of the court in this regard.
In light of the foregoing discussion, the issue is resolved in favor of the defendants and against the plaintiff. A decree cannot be granted as the partnership firm has already been dissolved. A thorough reading of the plaintiff's case suggests that the relief sought was an attempt to bring other claims within the limitation period. Based on the plaintiff's admissions in the plaint, this issue is decided against him under the provisions of Order 12 Rule 6 of the Code of Civil Procedure.
It is evident that the plaintiff's plea represents a strategic effort to circumvent the strict application of the law of limitation through VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:50:42 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 30 of 47 skillful drafting. Even assuming that all of the plaintiff's allegations and claims are true, no relief for the dissolution of the partnership firm can be granted in this case.
ISSUE NO. 1:
11. Whether the suit of the plaintiff is without limitation?
On relief 38 (a) and 38 (b) of prayer clause of the plaint for Declaration of Settlements dated 01.06.2000 and 11.06.2000 are binding and specific performance of those settlements:
Firstly, the plaint does not contain any paragraph explaining when the limitation period begins for the claimed reliefs. It only includes a paragraph on the cause of action, which merely states that the cause of action arose on various dates, as detailed in the plaint, and lastly on 25.06.2010, asserting that it is a continuing cause of action. The relevant paragraph on the cause of action is reproduced as follows:
"That the cause of action arose on various dates as detailed above and lastly on 25.06.2010 and is a continuing cause of action, which is recurring day by day.
Moreover, without prejudice to the suit being within time, the plaintiff is also entitled to exclusion of the time spent bonafide litigating in other proceedings as per the legal advice received and believed to be true."
The plaint lacks any explanation regarding the starting point of the limitation period for the relief sought. In the prayer clauses VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:50:56 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 31 of 47
(a) and (b) of paragraph 38 of the plaint, the plaintiff requests (i) a declaration that the settlements dated 01.06.2000 and 11.06.2000 are binding on both parties and (ii) specific performance of those settlements.
According to Article 58 of the Schedule appended to the Limitation Act, 1963, a suit seeking a declaration must be filed within three years from the date the right to sue first accrues. Similarly, the limitation period for a suit seeking specific performance of a contract is three years from the date the plaintiff became aware of the defendant's refusal to perform. In this case, the limitation period for both the declaration and specific performance would begin from the moment the plaintiff became aware of the defendant's refusal to honor the settlement.
However, as previously discussed, the plaint does not expressly mention when the defendant refused to perform the settlement. It is important to note that the plaintiff had filed an application under the Arbitration and Conciliation Act, 1996, before the Hon'ble High Court seeking the appointment of an arbitrator. In that application, dated 30.04.2001 (with a memo dated 28.04.2001), the plaintiff stated in paragraph 7(e)(8) that there was a dispute regarding the cancellation of the agreement to sell and other documents executed on 14.06.2000, alleging duress, coercion, and undue influence.
It is evident that the plaintiff was aware of the defendant's refusal to honor the settlement dated 11.06.2000 when the plaintiff raised VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:51:06 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 32 of 47 objections regarding the transfer of the shop through the General Power of Attorney (GPA) and related documents, which were executed in furtherance of that settlement. The contents of arbitration application suggests that the defendant refused to honor the settlement. This refusal was explicitly mentioned by the plaintiff in the Arbitration Application. Notably, the Hon'ble High Court dismissed the Arbitration Application on the grounds of the existence of the settlement dated 11.06.2000.
If the defendant's refusal to perform is not taken to have occurred from the date of the Arbitration Application, it can be reasonably considered to have started from the filing of the execution petition before the Hon'ble High Court on 02.03.2006. The very fact that the plaintiff filed the execution petition suggests that the defendant had refused to comply with the settlement. Furthermore, objections were formally filed by the defendant on 18.01.2007 against the execution petition. Even if this date of 18.01.2007 is considered the date of refusal, the present suit has still not been filed within the prescribed limitation period.
Based on the above discussion, it is clear that the suit was not filed within the statutory limitation period for the reliefs sought.
On relief 38 (c) and 38 (d) of prayer clause of the plaint for Declaration of GPA and Agreement to Sell dated 14.06.2000 as null and void and cancellation for the same:-
As discussed earlier, the limitation period for seeking relief of declaration under the Limitation Act is three years from the date VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:51:15 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 33 of 47 the right to sue accrues. Similarly, under Article 59 of the Limitation Act, the period for seeking relief for the cancellation of an instrument is also three years, starting from the date when the facts entitling the plaintiff to have the instrument cancelled or the contract rescinded first became known to him.
In this case, the limitation period for both the relief of declaration and cancellation is three years from the date the plaintiff became aware of the alleged deception by the defendant in transferring the wrong portion of the shop to the plaintiff's brother. The plaintiff seeks to cancel both General Power of Attorneys (GPAs) and both Agreements to Sell dated 14.06.2000, claiming they are null and void. However, the plaint does not specify when the plaintiff became aware of the defendant's alleged trickery in assigning the incorrect portion of the shop.
Given that the plaintiff was one of the executants of these documents, he must have been aware of their contents. If, for the sake of argument, it is assumed that the plaintiff discovered the defendant's deception at a later stage, we can infer that this awareness occurred by the time the Arbitration Application was filed. The plaintiff filed an application under Section 8/11 of the Arbitration and Conciliation Act before the Hon'ble Delhi High Court on 30.04.2001 (with the memo of parties dated 28.04.2001 and the petition dated 30.04.2001). In paragraph 7 of that application, the disputes and issues were briefly outlined. The relevant portion of paragraph 7(E)(8) is reproduced as follows:
VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:51:24 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 34 of 47 "Division of shop no. 7 and shop no. 8 at Patparganj Road, Opp. Radhu Palace Cinema, Delhi-92, equally between the Partners and Cancellation of Agreement to Sale and General Power Attorney, will etc. executed on 14.06.2000 under duress, coercion, and under influence."
From a perusal of the same, it is evident that the plaintiff was aware of the contents of those documents by at least 28.04.2001. In that petition, the ground for seeking the cancellation of the documents was that they were executed under duress, coercion, and undue influence. However, in the present suit, the plaintiff seeks cancellation of the documents on the grounds of trickery and manipulation, as well as in accordance with the terms and conditions of the mediation agreement dated 11.06.2000.
At this stage, it is relevant to refer to paragraph 8 of the plaint, which is reproduced as follows:
"That the plaintiff came to know of the manipulation only when wrong portion was given to his wife. Immediately plaintiff approached the court of Ld. ADJ praying for cancellation of the manipulated documents in which the portion "A" and "B" had been interchanged in the drawings attached to the agreement to sell, GPA etc. got registered by the defendant no. 1. It is pertinent to mention that defendant no. 1 got this manipulation done within three days, in a hurry and in a state of confusion, having the effect of reversing the portions and also depriving the plaintiff from the compensatory payment of Rs. 1.50 lakhs. Since the plaintiff did not VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:51:33 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 35 of 47 have any copy of the mediation settlement, the plaintiff also preferred an Arbitration Application before the Hon'ble Delhi High Court, seeking reference of disputes regarding distribution of stocks of the shop, sale proceeds of property and other claims including rendition of accounts."
The plaintiff has not specified the date on which the suit was filed, nor has any copy of the plaint been submitted to clarify this. However, it is evident from the suit number and the amended plaint on file (which is not disputed by the plaintiff) that the original suit was filed in the year 2001. The present suit, on the other hand, was filed on 01.07.2010.
Even if we assume that the plaintiff became aware of the alleged trick by the defendant on the date of filing the original suit in 2001, it is clear that the present suit was not filed within the prescribed limitation period. Therefore, it can be easily concluded that the suit is time-barred under the Limitation Act.
ON RELIEF 38 (E) FOR DISSOLUTION OF THE FIRM:
As already determined under issue no. 3, the partnership firm has been dissolved. The relief sought by the plaintiff appears to be a clever attempt to bypass the strict application of the law of limitation through skillful drafting. Even if all the allegations and claims made by the plaintiff are assumed to be true, no such relief can be granted. The suit remains barred by the limitation period.
OTHER RELIEFS:
All other reliefs sought by the plaintiff are merely consequential VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:51:44 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 36 of 47 to the substantive reliefs previously discussed. Since the substantive relief cannot be granted, the consequential reliefs must also be denied. The Hon'ble Supreme Court, in the case titled Sukhbiri Devi vs Union of India (Civil Appeal No. 10834 of 2010 dated 29 September 2022) observed:
"26. The relief sought for, in suit No.410/2000 would reveal that the first prayer, which is the main prayer, is declaratory in nature. Even according to the plaintiffs, as revealed from the plaint the second prayer (extracted hereinbefore) is only consequential relief. A perusal of the same would undoubtedly show that it is consequential and not an independent one and therefore the courts below are right in holding that the said prayer is grantable only if the first prayer is granted. In this case based on the determination on the preliminary issue of limitation and in accordance with the decision on that preliminary issue the suit was dismissed...... "
If the substantive relief is barred by limitation, then any consequential relief would also be deemed barred by limitation. The Hon'ble Supreme Court, in Padhiyar Prahladji Chenaji (D) vs Maniben Jagmalbhai (D), reported in 2022 LiveLaw (SC) 241, observed:
"8.3 Therefore, once the suit is held to be barred by limitation qua the declaratory relief and when the relief for permanent injunction was a consequential relief, the prayer for permanent injunction, which was a consequential relief can also be said to be barred by limitation. It is true that under normal circumstances, the relief of permanent injunction sought is a substantive relief and the period of limitation would commence from the date on which the possession is sought to be disturbed so long as VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:51:53 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 37 of 47 the interference in possession continuous. However, in the case of a consequential relief, when the substantive relief of declaration is held to be barred by limitation, the said principle shall not be applicable. "
The Hon'ble Supreme Court, in Khatri Hotels Pvt. Ltd. & Anr vs Union Of India & Anr, as reported in AIR 2011 SC 3590, observed:
"27. While enacting Article 58 of the 1963 Act, the legislature has designedly made a departure from the language of Article 120 of the 1908 Act. The word `first' has been used between the words `sue' and `accrued'. This would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue first accrues. To put it differently, successive violation of the right will not give rise to fresh cause and the suit will be liable to be dismissed if it is beyond the period of limitation counted from the day when the right to sue first accrued."
The relief for a money decree is also barred by limitation, as it stems from the settlement dated 11.06.2000, which itself cannot be enforced due to the expiration of the limitation period. Since this relief is secondary and consequential to the settlement, it is likewise subject to the same limitation bar.
Additionally, relief no. I, which seeks a permanent injunction, is also a consequential relief. The plaint does not present an independent cause of action for this claim, making it dependent on the settlement dated 11.06.2000. As a result, both the relief for the money decree and the injunctions cannot also be granted due VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:52:03 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 38 of 47 to the bar of limitation.
EXCLUSION OF TIME:
The plaintiff has argued that, for the purpose of calculating the period of limitation, he is entitled to exclude the time spent bona fide litigating in other proceedings based on legal advice he received and believed to be correct. However, there is merit in the argument raised by the learned counsel for the defendant that the plaintiff has not provided the necessary facts and details in the plaint to justify such an exclusion.
No specific dates or time periods have been mentioned by the plaintiff for which he seeks the exclusion. In fact, the plaintiff contradicts himself in paragraph 33 of the plaint by stating:
"Moreover, without prejudice to the suit being within time, the plaintiff is also entitled to exclusion of the times spent bonafide litigating in other proceedings as per legal advice received and believed to be true."
From this statement, it seems that the plaintiff is claiming to have filed the suit within the prescribed limitation period, while simultaneously asserting that he is entitled to exclude certain periods. This contradiction weakens the plaintiff's position.
Even if the defendant's arguments are disregarded, it is still necessary to examine whether the plaintiff is entitled to exclude any time for the purpose of calculating the limitation period. Section 14 of the Indian Limitation Act, 1963, is relevant in this VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:52:12 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 39 of 47 context, and it is reproduced as follows:
14. Exclusion of time of proceeding bona fide in court without jurisdiction. -
(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.
Explanation.--For the purposes of this section,--
(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;
(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction. Digitally signed VIKAS by VIKAS GARG Date:
GARG 2024.10.23
15:52:26 +0530
CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 40 of 47
To avail the benefits under Section 14 of the Limitation Act, one of the essential requirements is that the previous court, where the earlier suit or proceedings were instituted or were pending, must have been unable to entertain them due to a defect of jurisdiction or "other cause of a like nature." Upon examining the orders from the earlier proceedings, none indicate that those proceedings were terminated or dismissed because the court was unable to entertain them due to a defect of jurisdiction or other cause of a like nature.
The Hon'ble Delhi High Court, in arbitration proceedings, disposed of the petition, noting:
"In view of the statements of the parties, there is no need to appoint any arbitrator as the disputes have already been settled a settlement award as per Annexures A and B. In case contention of the petitioner is that the said settlement award has not been implemented fully, it would be open to seek enforcement thereof by resorting the appropriate legal proceedings."
By order dated 26.03.2009, the plaintiff's execution petition was dismissed, with the observation that the parties had resolved their disputes through mediation and no decree had been passed as per the terms of Section 2(2) of the CPC.
The appeal against this order was also dismissed by order dated 18.05.2009, wherein the Hon'ble Delhi High Court observed:
"10 we are thus of the considered view that VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:52:36 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 41 of 47 the remedy of execution is not available to the appellant. The appellant has been endeavoring to seek different remedies under provision of the said Act but will have to initiate appropriate legal proceedings in accordance with law for seeking enforcement of the settlement in the form of the private agreement"
These petitions were not dismissed due to a lack of jurisdiction but solely for the stated reasons. Therefore, it cannot be concluded that the Hon'ble Delhi High Court dismissed any of the petitions on grounds of a jurisdictional defect or a defect of a similar nature.
At this juncture, it is pertinent to refer to the decision of the Hon'ble Kerala High Court in Thankamma vs. Bharati Pillai, 1995 (2) AIHC 1310 (decided on 02.08.1993), where the Hon'ble High Court observed:
"7. What is required for the purpose of Section 14(1) is a defect of jurisdiction or other similar cause which renders the court unable to entertain the suit and to proceed to trial. A mere inability to grant the relief claimed in a particular suit because it is not grantable, or because a suit of that nature is not maintainable, though the suit is within the jurisdiction of the court is not a case which falls u/s 14(1)."
Furthermore, the withdrawal of two suits with liberty to file a fresh suit does not exclude the periods spent litigating those suits for the purpose of computing the limitation in the present case.
The order in Suit Nos. 435/09 and 436/09, titled Ravi Aggarwal VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:52:46 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 42 of 47 vs. Anil Jagota, dated 20.05.2010, is reproduced as follows:
Suit No. 435/09; 436/09 Ravi Agrawal Vs. Anil Jagota 20/05/2010 at 11:44 am.
Pr.- Sh. Sunil Satyarthi, counsel for the plaintiff alongwith plaintiff.
An application under Order 23 Rule 1 (3) C.P.C. has been filed on behalf of the plaintiff to withdraw this case.
Plaintiff has given statement to withdraw this suit.
In view of statement given by him, present suit is dismissed as withdrawn. Liberty is given to the plaintiff to file fresh suit on same cause of action.
File be consigned to record room.
(PULASTYA PRAMACHALA) CCJ/ARC(E)/MM,KKD 20/05/2010.
The copy of the statement referred to in the aforementioned order is also present in the case file and is reproduced below as follows:
Suit No. 435/09Ravi Agrawal vs. Anil Jagota 20/05/2010 at 11.30 am.
Statement of Sh. Ravi Agrawal S/o Late B.L. Agrawal aged about 43 years R/o 176, West Guru Angad Nagar, Laxmi Nagar, Delhi-92.
ON SA I am plaintiff in this suit. I want to withdraw this suit as it suffers some technical defects. I may be given liberty to file a fresh suit in VIKAS Digitally signed by VIKAS GARG Date: 2024.10.23 GARG 15:52:55 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 43 of 47 respect of same subject matter and same cause of action. Mater be disposed of accordingly as withdrawn.
RO&AC CCJ/ARC/(E)/MM,KKD:20/05/2010 The existence of the said order and the accompanying statement has not been contested by the plaintiff. Moreover, there is nothing in this order that indicates any jurisdictional defect or similar issue.
There is also an order dated 10.02.2004 in Suit No. 77/03, titled Ravi Aggarwal vs. Anil Jagota, passed by the court of Sh. Kuldeep Narayan (Civil Judge, Karkardooma Courts, Delhi), wherein the court permitted the withdrawal of the suit with liberty to file a fresh suit, subject to a cost of Rs. 3,000/-. However, this order does not indicate any defect in the jurisdiction of that court which would have prevented it from entertaining the suit. Furthermore, there is no dispute regarding the existence of this order.
At this point, it is once again relevant to refer to the decision of the Hon'ble Kerala High Court in Thankamma vs. Bharati Pillai (supra), where the Hon'ble High Court observed:
".....Order 23 Rule 2 provides that if any fresh suit is instituted on permission granted under Rule 1 of that Order, the Plaintiff shall be bound, under the law of limitation in the same manner as if the first suit had not been instituted. Section 14(3) of the Limitation Act provides an exception to this rule by which the benefit of exclusion of time is given where the VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:53:05 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 44 of 47 previous suit is permitted to be withdrawn for defect of jurisdiction or other cause of a like nature. In all other cases, the provisions of Order 23 Rule 2 will govern...."
In the present case as well, no grounds have been established to justify excluding the period spent in those suits.
EXTENSION OF PERIOD OF LIMITATION BY HON'BLE HIGH COURT:
Learned counsel for the plaintiff contended that the Hon'ble High Court extended the period of limitation. He drew the court's attention to paragraphs 10 and 11 of the Hon'ble Delhi High Court's order dated 18.05.2009, passed in the appeal against the execution petition. The relevant paragraphs are reproduced below:
"10. We are thus of the considered view that the remedy of execution is not available to the appellant. The appellant has been endeavouring to seek different remedies under provisions of the said Act but will have to initiate appropriate legal proceedings in accordance with law for seeking enforcement of the settlement in the form of a private agreement.
11. Learned counsel for the appellant states that in view of his bona fide endeavour to seek enforcement of the settlement agreement and the legal proceedings initiated in pursuance thereto the period of limitation for enforcement of that agreement should be extended. This is a matter to be examined by the Court where such proceedings are initiated, if any."
The Hon'ble High Court's order does not contain any directive to VIKAS Digitally signed by VIKAS GARG GARG Date: 2024.10.23 15:53:13 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 45 of 47 extend the limitation period. The Hon'ble High Court, in response to counsel's request for extension of limitation period, specifically directed that the question of limitation would be determined by the respective court where proceedings are initiated, rather than extending the limitation period through its own order.
CONCLUSION:
12. As discussed above, Issue No. 3 is decided against the plaintiff under the provisions of Order 12 Rule 6 of the Code of Civil Procedure. No further evidence is necessary, as it would merely be a futile exercise.
The question of limitation in this case is a purely legal one, determined by the admitted facts and circumstances as presented. The case rests on the contents of the plaint and the accompanying documents, along with certain undisputed records, such as court orders and statements made before the court. At this juncture, it is pertinent to again refer to the decision in Sukhbiri Devi vs. Union of India (Civil Appeal No. 10834 of 2010, dated 29 September 2022), where the Apex Court observed:
"....In this case based on the determination on the preliminary issue of limitation and in accordance with the decision on that preliminary issue the suit was dismissed. As held by the three-judge Bench in the decision in Nusli Neville Wadia's case (supra) the provisions under Order XIV Rule 2(1) and Rule 2(2)(b) permit to deal with and dispose of a suit in Digitally signed VIKAS byDate:VIKAS GARG GARG 2024.10.23 15:53:22 +0530 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 46 of 47 accordance with the decision on the preliminary issue....."
In view of the foregoing discussion, it is conclusively established that the suit is barred by limitation, rendering its continuation a futile exercise.
Accordingly, the plaintiff's suit is dismissed, with no order as to costs.
13. Decree sheet be prepared accordingly.
14. File be consigned to record room after due compliance.
Digitally signedVIKAS byDate:VIKAS GARG Pronounced in the open court GARG 2024.10.23 15:53:29 +0530 on 23nd October 2024 (Vikas Garg) DJ-05/East/KKD Delhi/23.10.2024 CS No. 904/16 Ravi Agrawal Vs. Anil Jagota & Ors. Page no. 47 of 47