Delhi District Court
Sardar Raghubir Singh Arora vs Sardar Gurcharan Singh on 28 July, 2014
IN THE COURT OF JAGDISH KUMAR
ADJ-06 (WEST): DELHI
Civil Suit No. : 213/14
Unique Case ID No : 02401C0887742003
In the matter of:
Sardar Raghubir Singh Arora
Sole Proprietor
M/s Akal Sahai
S/o Sardar Mohinder Singh Arora
R/o O-5, Chittaranjan Park
New Delhi - 110019 .............. Plaintiff
Versus
1. Sardar Gurcharan Singh
S/o Sardar Sukhala Singh
R/o A-18/1, Rana Pratap Bagh
Delhi - 110007
2. Smt. Harwant Kaur
W/o Sardar Pritam Singh
R/o 1112, Sector C-1
Vasant Kunj
New Delhi - 110034
3. The Government of the
National Captial Territory of Delhi
Through :
The Chief Secretary
5 Sham Nath Marg
Delhi 110054 ............ Defendants
Date of institution of the Suit : 09.01.1998
Date of arguments : 23.07.2014
Date of decision : 28.07.2014
CS No. : 213/14 Page 1/23
SUIT FOR DECLARATION AND PERMANENT / MANDATORY
INJUNCTION
JUDGMENT :-
1. The facts of the case are that the plaintiff claimed himself as sole and absolute owner / lessee in respect of factory shed bearing no. C-127, Flatted factories complex, Okhla Industrial Estate, New Delhi - 110020 (hereinafter referred to as suit property). The President of India is lessor of the suit property. The lease was executed by the Directorate of Industries, Government of NCT of Delhi on behalf of President of India in favour of plaintiff. The lease was executed on 07.01.1982.
2. The plaintiff stated that he is carrying on business activities under the trade name of 'Akal Sahai' since the year 1981. The proprietary firm of the plaintiff, under the name and style of 'Akal Sahai Wood Products', was engaged in the business of manufacturing of sports goods and wooden cases, from the inception of business on 01.02.1981. The plaintiff stated that he has applied to the Directorate of Industries, Delhi Administration, Delhi for allotment of flatted factory at Okhla, in the name of firm 'Akal Sahai', of which the plaintiff was sole proprietor and deposited a bank draft no. 720374 dated 10.03.1981 for a sum of Rs. 2,000/-. The application was accepted by President of India and lease deed dated 07.01.1982 was registered in his favour vide registration no. 214 in Additional Book I, volume 4602, at pages 79 to 82 dated 12.01.1982. The possession was handed over to him in the year 1982.
CS No. : 213/14 Page 2/233. The plaintiff stated that in or around the year 1983 he suffered from slip of disc of back bone and was not is a capacity to walk or to carry on his normal business activities. He, therefore, promoted a partnership firm under the name and style of 'Akal Sahai' to carry on the business of manufacture of sports goods and corrugated boxes from the suit property with three partners namely (1) Sardar Labh Singh, (2) Sardar Gurcharan Singh and (3) Smt. Harwant Kaur. The plaintiff stated that he has no intention of transferring, alienating or assigning the leasehold rights of the suit property in favour of the said partnership firm or its partners. The plaintiff stated that the lease deed between him and the President of India prohibited the subletting, sale, transfer, assign or otherwise part with the possession of the whole or any part of the suit property except with the previous consent in writing of the Lessor to avoid any adverse consequences. The plaintiff stated that he, vide letter dated 02.11.1983, has requested the Deputy Director of Industries to change the constitution of the firm 'Akal Sahai'. The said request was allowed by the lessor, who vide letter dated 06.04.1984 informed the plaintiff that he was permitted to have Sardar Labh Singh Arora, Sardar Gurcharan Singh and Smt. Harwant Kaur as partners with him. The plaintiff further stated that he was directed to execute a fresh partnership deed within 7 days of the receipt of the said letter. The partnership deed dated 16.04.1984 with Sardar Labh Singh, Sardar Gurcharan Singh and Smt. Harwant Kaur as partners was executed with 25 % share each. The partnership was created only to carry on the business activities from the suit property. The partnership deed dated 16.04.1984 did not confer any leasehold rights in the suit property in favour of partners namely Sardar Labh CS No. : 213/14 Page 3/23 Singh, Sardar Gurcharan Singh and Smt. Harwant Kaur. There was no pooling of the suit property into the common stock of the partnership firm. The partnership deed dated 16.04.1984 was effective from the same date. The duration of the partnership was at the will of the parties. The partnership firm 'Akal Sahai' did not take over assets and liabilities of the sole proprietary firm 'Akal Sahai' of the plaintiff. The leasehold rights of the suit property were continued to be vested in the plaintiff. The permission given by the Directorate of Industries to the Proprietary firm 'Akal Sahai' since the commencement of lease to produce sports goods, modified vide approval letter dated 13.07.1984 by including the manufacture of corrugated boxes. Sardar Labh Singh one of the partners in the firm 'Akal Sahai' retired in the year 1986, therefore, the firm was dissolved vide dissolution deed dated 28.02.1986. The retiring partner relinquished and abandoned all his rights in favour of remaining partners who formed a new partnership firm vide partnership deed dated 01.03.1986. The new partnership firm created through partnership deed dated 01.03.1986 was having members namely Sardar Raghubir Singh Arora i.e. plaintiff, Sardar Gurcharan Singh defendant no. 1 and Ms. Harwant Kaur defendant no. 2 with a share of 34% with plaintiff and 33% sahre each with defendant no. 1 & 2. The partnership firm 'Akal Sahai' with the partners continued carrying on business from the suit property even though the partnership was further modified vide partnership deed dated 01.10.1992. The plaintiff further stated that he has never requested the Directorate of Industries for approval of sub-let, sell, transfer or assign the leasehold rights in the suit property or to part with possession thereof, in favour of partnership firm 'Akal Sahai' as per clause 2 (f) of the Lease Deed dated 07.01.1982 and nor there CS No. : 213/14 Page 4/23 was any occasion for such request to be considered or granted by the Lessor. The erstwhile partners did not at any time claimed the leasehold rights of the suit property being vested in the partnership firm 'Akal Sahai' or in them. The plaintiff stated that he has mortgaged the suit property in the year 1994 in favour of Dena Bank Branch office, Okhla Industrial Estate, New Delhi by deposit of original lease deed dated 07.01.1982 to avail finance for the firm 'Akal Sahai Wood Products' the sole proprietary firm of the plaintiff. The plaintiff further stated that he has inducted his son Amarpreet Singh Arora as a partner in his proprietary firm 'Akal Sahai Wood Products' and the defendants have not raised any objection in that regard. The plaintiff stated that he and defendant no. 1 & 2 carried on the business of firm 'Akal Sahai', from the suit property since the year 1984 as per the constitution of the firm framed from time to time, of manufacturing corrugated boxes till the year 1997. The plaintiff alleged that sometime before 1994 defendant no. 1 & 2 tampered with the original lease deed dated 07.01.1982 and inserted therein unauthorizedly that the constitution of the firm 'Akal Sahai' was changed from proprietorship to partnership. The entry was ignored by him (plaintiff) because the entry was not carrying the signatures or seal of any one. Such entry was also not registered in the office of Sub Registrar, New Delhi.
4. The plaintiff stated that in the course of time, his ailment (i.e. slip of disc of back bone) improved, his son Amarpreet singh Arora has become major and he was inducted as partner of the firm 'Akal Sahai Wood Products' and therefore the plaintiff was in a better position to manage business activities from the suit property. Therefore, in the month of March 1997 he (plaintiff) expressed his CS No. : 213/14 Page 5/23 desire to defendant no. 1 & 2 to dissolve the partnership firm 'Akal Sahai'. So that he could carry on the business activities exclusively by him from the suit property. The plaintiff further stated that he has also informed the Directorate of Industries in this regard vide his letter dated 05.03.1997. These acts were not liked by the defendant no. 1 & 2 who became inimical towards him (plaintiff) and started harassing and intimidating him since the March 1997. The plaintiff further alleged that the defendants have also removed various books of account and records of the partnership firm from the suit property. They placed their own additional locks at the entrance of the factory shed, i.e. suit property to prevent excess to him independently in the suit property. On 01.04.1997 at about 5 PM when he took an account book to examine the same, Sardar Pritam Singh, husband of the defendant no. 2, who was an employee of the firm, snatched the book of account from him (plaintiff). He also physically assaulted him (plaintiff).
5. On 02.04.1997 defendant no. 1 opened the factory late and when questioned by the plaintiff in this regard, he claimed himself as owner of the suit property. The plaintiff further alleged that defendant no. 1 & 2 have not opened the suit property on 03.04.1997 and made him (the plaintiff) and workers wait from the morning till 3:30 PM. On inquiry, the defendant no. 1 stated that plaintiff has nothing to do with the suit property. The plaintiff further alleged that defendant no. 1 & 2 also removed 7 papers reels worth Rs. 30,000/- and 3 drums of sillicate worth about Rs. 15,000/- belonged to the dissolved partnership firm. The plaintiff stated that in the circumstances, he has issued a legal notice dated 10.04.1997 and informed the defendant no. 1 & 2 that partnership firm 'Akal Sahai' stood dissolved and CS No. : 213/14 Page 6/23 requested the defendant no. 1 & 2 to vacate the suit property forthwith. The plaintiff stated that he has also informed the Registrar of Firms, Delhi and the Directorate of Industries, Delhi vide letter dated 10.04.1997. The public notice was also given on 20.04.1997 in the daily newspaper 'Hindu' informing the public at large that he alone was the allottee of the suit property. He further stated that in the newspaper 'National Herald' dated 22.04.1997 he has also informed the public at large that partnership firm 'Akal Sahai' stood dissolved w.e.f. 12.07.1997.
6. The plaintiff stated that the defendants have challenged the equitable mortgage created by him (the plaintiff) in favour of Dena Bank vide their letter dated 02.04.1997 and demanded the original lease deed be returned to them. The bank, however, did not comply with the request of the defendants. The defendant no. 1 & 2 have replied the legal notice vide reply 26.04.1997. The rejoinder dated 15.06.1997 to reply was also issued by the plaintiff. The plaintiff further stated that defendant no. 2 has filed a suit bearing no. 268/97 in the Court against the Dena Bank and the plaintiff. The plaintiff stated that the defendant no. 1 & 2 are falsely claiming to be owner of the suit property and are also claiming possessory rights therein. The plaintiff alleged that defendants are threatening to sell, alienate or dispose of their alleged share of the 33% each in the tenancy rights of the suit property in favour of 3rd party to harass him (plaintiff). The plaintiff further stated that the closure of the factory has affected the business and goodwill of the plaintiff. The plaintiff stated that defendant no. 1 & 2 are not having any right, title or interest in the suit property. On the above stated facts the plaintiff has sought relief as CS No. : 213/14 Page 7/23 claimed in prayer of the suit.
7. Summons of the suit were issued to the defendants. The defendants have put their appearance. The defendant no. 1 & 2 have filed a joint written statement. The defendant no. 1 & 2 stated in the written statement that the plaintiff Raghubir Singh Arora has wrongly shown himself as proprietor of the firm 'Akal Sahai'. Infact, M/s Akal Sahai is a partnership firm constituted by 3 partners and duly registered under the Partnership Act. The defendant no. 1 & 2 have challenged the locus standi of the plaintiff to file the present suit. The defendant no. 1 & 2 have stated that the plaintiff Raghbubir Singh has chosen to opt out of the partnership firm and remaining partners showed clear intentions to carry on the business. The defendant no. 1 & 2 contended that till date no dissolution deed has been executed and accounts have not been settled of the partnership firm. The sales tax and other statutory liabilities are still pending against the partnership firm. The defendant no. 1 & 2 stated that the plaintiff has not approached the Court with clean hands and has suppressed the material facts from the Court. The defendant no. 1 & 2 stated that they have already filed a suit for mandatory injunction against the plaintiff thereby seeking mandatory injunction against the plaintiff and Dena Bank from using the original lease deed of the suit property.
8. While replying on merit, the defendant no. 1 & 2 have denied that plaintiff is the absolute owner / Lessee in respect of the suit property. The defendant no. 1 & 2 contended that President of India has executed the lease deed in favour of M/s Akal Sahai which is CS No. : 213/14 Page 8/23 constituted by three persons namely Sh. Raghubir Singh Arora (plaintiff), Sardar Gurcharan Singh and Smt. Harwant Kaur (defendants). The defendant no. 1 & 2 stated that they are in continuous and uninterrupted possession of the suit property since 1984. The defendant no. 1 & 2 alleged that on 03.04.1997 the plaintiff with the help of police closed the factory and put additional locks on factory premises and brought the functioning of the factory to total standstill. The defendant no. 1 & 2 stated that the change of Constitution of the firm is of legal character and it signifies a change in the possession of the premises in favour of the newly constituted firm. The Director of Industries permitted the change in the Constitution in the year 1984, and gave the suit property to M/s Akal Sahai partnership firm, then consisting of four partners namely Sh. Raghubir Singh Arora (plaintiff), Sardar Gurcharan Singh and Smt. Harwant Kaur (defendant no. 1 & 2) and Sh. Labh Singh (who retired subsequently). The change of Constitution was permitted vide letter no. H-2/1086/C-127/D1/L1/8671 dated 06.04.1984. The defendant no. 1 & 2 stated that no dissolution of partnership can be made effective till the dissolution deed is signed by all the partners. The defendant no. 1 & 2 have denied tampering of original lease deed as alleged by the plaintiff. They stated that the note made in the original lease deed are by the Directorate of Industries' staff which are exactly according to approval given by the Directorate of Industries. The defendant no. 1 & 2 alleged that Amarpreet Singh son of the plaintiff himself in his own handwriting filled up the the illegible portion of the notings made by the Directorate of Industries in the photocopy of the original lease deed. The defendant no. 1 & 2 stated that they have already initiated criminal proceedings against the plaintiff and his son. The defendant CS No. : 213/14 Page 9/23 no. 1 & 2 have denied that they have prevented the free ingress and egress of the plaintiff to the suit property. They have alleged that it is the plaintiff who has prevented the entry of defendants to the suit property. The defendant no. 1 & 2 contented that power to change the Constitution rests with the Directorate of Industries and an individual allottee does not get any title to the property more than what he is intended to be conferred by the terms and conditions of the lease deed. The defendant no. 1 & 2 alleged that the plaintiff is neither the lessor nor the lessee of the suit property.
9. In the present case the true and correct facts are that M/s Akal Sahai was given a shed bearing no. C-127, Flatted Factory on rental basis then a partnership firm. The defendant no. 1 & 2 further stated that the Directorate of Industries asked M/s Akal Sahai to deposit a sum of Rs. 1,440/- for change in constitution of the firm in respect of the suit property and same was deposited vide treasury challan no. 32A dated 11.01.1984. The defendant no. 1 & 2 stated that Directorate of Industries require the partners to execute an indemnity bond to the effect that they shall not part with his or her interest in the suit property without the permission of the Lessor. The defendant no. 1 & 2 further stated that the lease shall stand automatically terminated and exemption granted U/s 20 and allotment made U/s 23 of the L.R. (C&R) Act lapsed if there is any change in the Constitution of the said partnership firm. The defendant no. 1 & 2 stated that the partners had to undertake to abide by the terms and conditions of the original lease deed and also to file return under the U.L. (C&R) Act, 1976 if the extent of his/her share in the shed together with any other, if already CS No. : 213/14 Page 10/23 held by him/ her, exceeds the aggregates of the ceiling limit prescribed under U.L. (C&R) Act, 1976. The defendant no. 1 & 2 stated that the partners have acquired all right, title and interests in the tenancy rights of the suit property.
10. The defendant no. 1 & 2 stated that, subsequently, MCD license was amended in the name of partnership firm. Similarly, S.S.I. Certificates was also converted and issued in the favour of partnership firm. The defendant no. 1 & 2 have admitted that in the year 1986 one of the partners namely Sh. Labh Singh retired and dissolution deed was executed at that time but still the formal approval from the Directorate of Industries is awaited for the deletion of his tenancy rights. The fact has been acknowledged by the letter no. H-2/1086/C-127/DI/ LIII/732 dated 11.04.1988. The defendant no. 1 & 2 further stated that in the original lease deed only sports goods manufacturing was permitted but vide letter no. H-2/1086/C-127/DI/ 14402 dated 13.07.1984 the permission was given for manufacturing of corrugated boxes. The defendant no. 1 & 2 stated that since 1984 the firm is running the business at the suit property. The defendant no. 1 & 2 further stated that original lease deed was for 3 years from 01.12.1981 to 30.11.1984. No fresh lease deed has been entered into by the Directorate of Industries. The defendant no. 1 & 2 stated that the owner of the suit property is Directorate of Industries who is competent to decide the tenancy rights in the suit property. The defendant no. 1 & 2 further stated that in the legal notice dated 10.04.1997 the plaintiff has mentioned that he wrote a letter dated 05.03.1997 to the Commissioner of Industries requesting him that the CS No. : 213/14 Page 11/23 partnership deed dated 01.03.1986, which was sought to be approved by him by way of application, may not be approved. The defendant no. 1 & 2 further stated that the assets and liabilities of the proprietorship firm was taken over by the partnership firm namely M/s Akal Sahai and all the dues including rent etc. were paid by and on behalf of partnership firm. The defendant no. 1 & 2 further stated that Sh. Labh Singh was paid a sum of Rs. 10,227/- as his share in the tenancy rights in 1986 on his retirement. The defendant no. 1 & 2 further stated that individual partners of the firm M/s Akal Sahai started taking salary and interest on the capital w.e.f. 01.10.1992, in view of the amendment in the provision of the Income Tax Act. The legal notice dated 10.04.1997 has been admitted by defendant no. 1 &
2. The defendant no. 1 & 2 stated that leasehold rights are determined as per the provisions of the lease deed. In the year 1996, the value of the tenancy rights was calculated about Rs. 40,000/- and it was agreed among the partner to pay Sh. Labh Singh a sum of Rs. 10,227 being 1/4th share. The defendant no. 1 & 2 stated that since 1994, the firm M/s Akal Sahai has been bearing all the expenses of suit property such as rent, insurance and MCD license fee etc. These expenses have been shown in the annual income tax return. The defendant no. 1 & 2 stated that the plaintiff unauthorizedly mortgaged the suit property with the DENA Bank. The defendant no. 1 & 2 have denied the fact that plaintiff was suffering from slip of disc of backbone. The defendant no. 1 & 2 have denied all other allegations as leveled by the plaintiff against them.
CS No. : 213/14 Page 12/2311. The defendant no. 3 has also filed a written statement and stated in the written statement that a lease deed was executed on 07.01.1982 with respect to flat / shed no. C-127, between the answering defendant and M/s Akal Sahai, whose sole proprietor, at that time, was Sh. Raghubir Singh. It is further stated by the defendant no. 3 that a letter dated 14.06.1983 was written by Sh. Raghubir Singh to change the constitution of the firm by including certain partners to carry on his business activities. The request was approved by letter dated 06.04.1984. Later on, in the year 1986, a request was made on behalf of the firm to reconstitute the partnership firm as one of the partner namely Sh. Labh Singh had retired. It is stated by the defendant no. 3 that no fresh lease deed was executed between the defendant no. 3 and remaining three partners of the firm. The defendant no. 3 further stated that defendant no. 1 & 2 were allowed only to use the premises vide letter dated 06.04.1984 issued to the firm M/s Akal Sahai. The defendant no. 3 further stated that change of constitution was permitted to carry on business activities. The defendant no. 3 stated that suit should be dismissed against the answering defendants.
12. The plaintiff has filed replication denying the contentions of the written statement filed by defendant no. 1 & 2 and reiterating and reaffirming as those of the plaint.
13. On the pleadings of the parties, the following issues were framed on 08.01.1999 :-
1. Whether the plaintiff is he sole lessee of the suit property.
2. Relief and costs.CS No. : 213/14 Page 13/23
14. The plaintiff has examined himself as PW1 and tendered his affidavit as A-1 and endorsed 7 documents i.e. site plan of the suit property as Ex. P1, certified copy of the lease deed dated 07.01.1982 in his name by the authorities as Ex. P2, copy of partnership deed dated 16.04.1984 as Ex. P3, copy of dissolution deed, as Labh Singh retired, as Ex. P4, fresh partnership deed on retirement of Labh Sigh dated 01.03.1986 as Ex. P5, copy of letter dated 02.11.1982 as Ex. P6, copy of letter dated 06.04.1984 as Ex. P7. The plaintiff has also examined Sh. Kewal Ram Sharma UDC of Sales Tax office as PW1. He relied upon the documents Ex. PW1/1 to PW1/4 respectively.
15. The defendant No. 1 examined himself as DW-1 in his defence.
The DW-1 relied upon documents i.e. approved guidelines titled as 'Land Management' as DW1(i), copies of application by plaintiff to Directorate of Industries and letter of Asstt. Director of Industries as DW1 (ii), Treasury challan no. 32 A as Ex. DW1 (iii), copy of duly registered indemnity bond as Ex. DW1 (iv), Directorate of Industries' approval vide letter no. H-2/1086/C-127/DI/L1/867 dated 06.04.1984 as Ex. DW1 (v), copy of acknowledgment of registration by Registrar of Firms as Ex. DW1 (vi), copy of the MCD license and SSI Registration certificate as Ex. DW1(vii) & as Ex. DW1(viii), copy of the registration certificate from Shop & Establishment department as Ex. DW1 (ix), copy of testimony of Directorate of Industries as Ex. DW1
(x), copy of the order of Sh. Lal Singh, Ld. ADJ as Ex. DW1 (xi) copy of trading and profit and loss account of M/s Akal Sahai as Ex. DW1
(xii), copies of balance sheets of M/s Akal Sahai as on 25.02.1986 and CS No. : 213/14 Page 14/23 28.02.1987 as DW1 (xiii), copy of the affidavit given by the plaintiff to mortgaged property as DW1 (xv), letter dated 25.04.1997 by plaintiff to Lt. Governor of Delhi as DW1 (xvi), copy of certified copy of cross examination in suit no.463/97 as Ex. DW1 (xvii), copy of assessment order for the year 1995-96 as Ex. DW1 (xviii), copy of the police investigation report on the complaint of plaintiff against the defendants as Ex. DW1 (xix).
16. The defendant has also examined DW2 Narender Kumar, who relied upon the application dated 14.06.1983 of Raghubir Singh made by Akal Sahai as DW2/1, letter dated 10.01.1984 for deposit of 1440/- as Ex DW2/2, Copy of challan dated 11.01.1984, form no. 32-A in the name of M/s Akal Sahai as Ex. DW2/3, indemnity bond dated 23.01.1984 executed by Sh. Gurcharan Singh, Smt. Harvant Kaur and Sh. Labh Singh as Ex. DW2/4 to Ex. DW2/6, copy of the letter dated 06.04.1984 addressed to M/s Akal Sahai allowing conversion of M/s Akal Sahai from the Proprietorship firm to Partnership firm as Ex. DW2/7, the record pertaining to A-9 flatted factory complex, Okhla Industrial Area showing the change of constitution dated 16.06.2011 as Ex. DW2/8 and conversion from rental to higher purchase dated 16.06.2011 as Ex. DW2/9, the record pertaining to C-128 flatted factory complex, Okhla Industrial Area showing the change of constitution dated 04.08.2000 as Ex. DW2/10 and conversion from rental to higher purchase dated 31.05.2007 as Ex. DW2/11.
17. I have heard Ld. Counsel for plaintiff and Ld. Counsel for defendant no. 1, Sh. Harbhajan Singh attorney of the defendant no. 2 CS No. : 213/14 Page 15/23 and Ld. Counsel for defendant no. 3 & given my thoughtful consideration to the submission made by them. I have also carefully gone through the material available on record. My issue wise findings are as under:-
18. Issue No. 11. Whether the plaintiff is the sole lessee of the suit property.
Issue is left to be proved by the parties. The issue which has to be answered by the court is whether the plaintiff is the sole lessee of the suit property. The admitted facts on record are the allotment of suit property on 07.01.1982 through lease deed executed between 'Akal Sahai', G-97, Kalkaji, New Delhi and President of India through Directorate of Industries i.e. Ex. P2 the partnership deed dated 16.04. 1984 exhibited as P3, the dissolution deed dated 28.02.1986 Ex. P4 and partnership deed dated 03.01.1986 Ex. P5 are also admitted on record. The case of the plaintiff is that he is owner / lessee of the suit property in view of lease deed Ex. P2. On the other hand, the defence of the defendant no. 1 & 2 are that suit property is the property of partnership firm namely M/s Akal Sahai. Ld. Counsel for defendant no. 1 and attorney of defendant no.2 have argued that suit property was allotted to the 'Akal Sahai' and not to the plaintiff. Ld. Counsel for defendant no. 1 and attorney of defendant no.2 submitted that the plaintiff could not have filed the present suit by his own name. On perusal of record i.e. Ex. P2 and evidence on record it is proved on record that President of India through Directorate of Industries have executed lease deed dated 07.01.1982 in favour of 'Akal Sahai' G-97, CS No. : 213/14 Page 16/23 Kalkaji, New Delhi to the 'Akal Sahai' the proprietorship concern of the plaintiff. As the partnership between the plaintiff and defendant no. 1 & 2 was created in the year 1984 first time through Ex. P3. The Ld. Counsel for defendant no. 1 and attorney of defendant no.2 submits that plaintiff has no locus standi to file the present suit. The law is settled that a proprietorship by itself is not a legal entity apart from its proprietor. The proprietory concern and the proprietors are the one and the same person. Reliance can be placed upon the judgment of Hon'ble High Court of Punjab and Haryana case titled as Bedi Sons Steels and Works Vs. B. G. brothers 2002 112 CompCas 426 P&H. So, the proprietorship 'Akal Sahai' and plaintiff is the same legal entity. The plaintiff has locus standi to file the present suit.
19. The defendant no. 1 & 2 have claimed right in the suit property on the pretext that after execution of partnership deed dated 16.04.1984 the suit property became the property of partnership concern namely M/s Akal Sahai. It is argued by the Ld. Counsel for defendant no. 1 and attorney of defendant no.2 that by virtue of Section 14 of the Partnership Act the suit property became the assets of the partnership firm M/s Akal Sahai. The law is settled that a property may be became the assets of a partnership firm if same is pooled in the assets of partnership firm.
20. In the present suit the defendant no. 1 & 2 have stated that in view of partnership deed Ex. P3 and Ex. P5 the suit property became the property of partnership firm. They relied upon the words as written in these documents. The documents find mention as "whereas, the CS No. : 213/14 Page 17/23 parties of first, second, third and fourth party are desirous of entering into partnership then to carry on the business in the name and style of M/s Akal Sahai to be carried out at C-127, Flatted Factory, Okhla Industrial Estate, New Delhi. The Ld. Counsel for defendant no. 1 and attorney of defendant no.2 further relied upon para 4 of the document P3 and P5 i.e. the partnership deed which describes as the firm shall maintain regular books of accounts in normal course of "the business and the books shall be closed on each year thereafter when filing profit / losses shall be determined, distributed and booked in the name of partners in the filing ratio first party 25%, second party 25%, third party 25%, fourth party 25%." They have also relied upon the para no. 9 of the partnership deed Ex. P3 and Ex. P5 which prescribes as "none of the partners shall mortgage incumber any of the property of the firm in his individual capacity without the consent of the other partners". The question arises whether the terms as mentioned in the document Ex. P3 and Ex. P5 i.e. the partnership deed, creates any right of the partnership firm in the suit property. On bare perusal of these paragraphs in the lease deed Ex. P3 & Ex.P5. It not reveals that plaintiff has pooled the suit property in the assets of the partnership firm. The property belonging to a person in the absence of an agreement to contrary does not, on the person entering into a partnership with others became a property of the partnership firm merely because it is used for the business of the partnership firm. It would become property of the partnership only if there is an agreement expressed or implied that the property under the agreement of partnership is to be treated as the property of partnership. The reliance can be placed upon the judgment of Hon'ble Supreme Court of India in case titled as Arjun Kanojia Vs. Santha CS No. : 213/14 Page 18/23 Ram Kanoj Tankar, 1969 UJ SC 405. The judgment relied upon by the defendant no. 2 titled as Abdul Latif and Ors. Vs. Mohd. Siddiq 27 (1985) DLT 423 also observe that tenancy rights of premises cannot be subject matter of partnership assets. The Ld. Counsel for defendant no. 1 and attorney of the defendant no. 2 has argued that the suit property has been pooled as assets of the partnership firm by the name of M/s Akal Sahai as reveals from the conduct and the communication made by the plaintiff to the Directorate of Industries. They have relied upon documents Ex. DW1/II i.e. copy of application made by plaintiff to change the constitution, The indemnity bond Ex. DW 1/ IV, the approval of change of constitution i.e. Ex. DW1/V. They have also stated that in the document Ex. P2 the endorsement has been made at point A to A by the Directorate of Industries which creates the right of the partnership firm in the suit property. The question arises whether the endorsement made of Ex. P2 at point A to A creates any lease rights in favour of defendant no. 1 & 2 or not. Admittedly, the lease deed Ex. P2 is registered lease executed on 07.01.1982. The lease deed was executed for three years. The defendant no. 1 & 2 and plaintiff have entered into partnership firm on 16.04.1984. After the creation of partnership firm M/s Akal Sahai no fresh lease deed was executed between the President of India through Directorate of Industries and the partnership firm M/s Akal Sahai. The noting made of the lease deed is as "Constitution of the firm Akal Sahai was changed from proprietorship to partnership concern with (i) Shri Raghubir Singh (ii) Sh. Labh Singh Arora (iii) Smt. Harwant Kaur and (iv) Sh. Gurcharan Singh with equal shares of 25% each. Subsequently, another change for constitution with (i) Shri Raghubir Singh 34% (ii) Smt. Harwant Kaur 33% and (iii) Sh.
CS No. : 213/14 Page 19/23Gurcharan Sigh 33%, is pending in the office of Commissioner of Industries, C.P.O. Bldg., Kashmiri Gate, Delhi." But these endorsement does not create any lease right in favour of partnership firm M/s Akal Sahai being not registered.
21. The document Ex. DW1/IV, DW1/V and DW1/VI does not create any right in favour of the defendant no. 1 & 2 because these documents are also not registered one. It is not the case of the defendant no. 1 & 2 that lease was executed in their favour orally for a period of 11 months by President of India through Directorate of Industries. The getting of license in the name of M/s Akal Sahai to run the business at the suit property does not create any right in the suit property in favour of the defendant no. 1 & 2. The defendant no. 1 & 2 have also relied upon the guidelines framed by the Directorate of Industries. I have gone through the guidelines. These guidelines cannot be prevailed upon the substantial law such as Transfer of Property Act, 1872. The lease can be executed under the purview of Transfer of Property Act, 1872. The Ld. Counsel for defendant no. 1 and attorney of the defendant no. 2 argued that defendant no. 1 & 2 are lessee of the suit property because they were made partners in the partnership firm M/s Akal Sahai in pursuance of clause 2 (f) of the lease deed Ex. P2. On perusal, the section 2 (f) of Ex. P2 reads as under " The lessee shall not sublet, sell, transfer or assign or otherwise part with the possession of the whole or part of the suit property except with the previous consent in writing of the lessee. He shall be entitled to refuse in his absolute discretion". The explanation:-
change in constitution / constituents will tentamount to part with the CS No. : 213/14 Page 20/23 possession.
22. From the perusal of this provision the condition has been imposed upon the lessee by the lessor that he will not let out transfer, sale, alien or otherwise part with the possession of the whole or any part of the lease property. It is not the case of the parties that suit property has been sublet or sold. The sale and transfer can be done through the provisions as envisaged under the Transfer of Property Act 1872. There is no such document on record, showing creation of right of partnership firm in suit property. To part with possession of lease property does not tentamount to sale, transfer of the suit property. The lease property may be part with possession by change in constitution but it does not mean that a lease has been created in favour of the person to whom possession has been given of the lease property. The possession may be parted with for the purpose of business.
23. The Submission of the Ld. Counsel for defendant no. 1 and attorney of the defendant no. 2 that the suit property was initially lease out to the plaintiff for three years only and thereafter lease deed has not been extended. Hence, plaintiff has no right in the suit property is also not sustainable. The extension of the lease between the plaintiff and the President of India through Directorate of Industries, is an issue between the plaintiff and President of India. The defendant no. 1 & 2 have no right to agitate this issue at all.
24. Even otherwise, from the perusal of document P 7, a letter CS No. : 213/14 Page 21/23 written by plaintiff to Directorate of Industries, it not reveals that plaintiff has written to the Directorate of Industries that he has sublet, sell or created any right in the suit property in favour of the Incoming partners of M/s Akal Sahai.
25. The Ld. Counsel for defendant no. 1 and attorney of the defendant no. 2 argued that in the similar situations the property bearing no. A-9, Okhla Industrial Area and A-128, Okhla Industrial Area were got transferred in the name of incoming partners. I have gone through the documents Ex. DW2/1 to DW2/ 11 and Ex. DW2/P1 to DW2/ P5. In case of property A-9, Okhla Industrial Area the lease holder has surrendered his all rights with respect to the property in favour of partnership firm. Similar was the situation in case of property bearing no. A-128, Okhla Industrial Area. The dissolution deed with respect to property bearing no. C-128, Flatted factories complex, Okhla Industrial Estate, New Delhi - 110020, clearly finds mentioned that the lesee / allottee has permitted the second party to get transferred the premises in his name. Here in the present suit there is no such facts established on the record that the plaintiff has surrendered his rights with respect to suit property in favour of partnership firm. The issue is decided in favour of plaintiff and against the defendants.
26. Relief In view of the discussions above it is held that lease ex. P2 was between the plaintiff and President of India through Directorate of Industries. The suit is decreed accordingly with cost.
CS No. : 213/14 Page 22/23The Decree sheet be prepared accordingly.
File be consigned to record room.
Announced in the open court (JAGDISH KUMAR)
today i.e on 28.07.2014 ADJ-06(WEST)/DELHI
TIS HAZARI COURTS
CS No. : 213/14 Page 23/23