Andhra Pradesh High Court - Amravati
Gruhalakshmi Finance vs Andavarapu Govindarajulu on 31 October, 2025
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
CIVIL REVISION PETITION No.2156 of 2025
Between:
1. GRUHALAKSHMI FINANCE, SRIKAKULAM, A REGISTERED
FIRM, REP. BY ITS MANAGING PARTNER, SRI
V.SARVESWARA RAO.
2. V.SARVESWARA RAO, S/O LATE SATYANARAYANA, AGED 64
YEARS, HINDU, BUSINESS, VSR COLONY TOWN HALL ROAD,
SRIKAKULAM.
...PETITIONER(S)
AND
1. ANDAVARAPU GOVINDARAJULU, S/O LATE
SATYANARAYANA, HINDU, AGED 65 YEARS, BUSINESS,
SRIKAKULAM AND 8 OTHERS.
...RESPONDENT(S):
DATE OF ORDER PRONOUNCED : 31.10.2025
SUBMITTED FOR APPROVAL:
HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
1. Whether Reporters of Local Newspapers
may be allowed to see the order? : Yes/No
2. Whether the copy of order may be
marked to Law Reporters/Journals? : Yes/No
3. Whether His Lordship wish to
see the fair copy of the order? : Yes/No
___________________________
JUSTICE SUBBA REDDY SATTI
Page 2 of 22
* HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
+ CIVIL REVISION PETITION No.2156 of 2025
% 31.10.2025
CIVIL REVISION PETITION No.2156 of 2025
Between:
1. GRUHALAKSHMI FINANCE, , SRIKAKULAM A REGISTERED
FIRM, REP.BY ITS MANAGING PARTNER SRI V.SARVESWARA
RAO.
2. V.SARVESWARA RAO,, S/OLATE SATYANARAYANA, AGED 64
YEARS, HINDU, BUSINESS, VSR COLONY TOWN HALL ROAD,
SRIKAKULAM.
...PETITIONER(S)
AND
1. ANDAVARAPU GOVINDARAJULU, S/O LATE
SATYANARAYANA, HINDU, AGED 65 YEARS, BUSINESS,
SRIKAKULAM AND 8 OTHERS.
...RESPONDENT(S):
! Counsel for Petitioner : Sri Vyas Venkatesh
^ Counsel for Respondents : Smt.M.S.V.S.Sudharani
< Gist:
> Head Note:
? Cases referred:
1) (2020) 7 SCC 366 : 2020 SCC OnLine SC 562
2) 2024 SCC OnLine SC 3844
3) (2015) 8 SCC 331 : 100 : 2015 SCC OnLine SC 118
4) (2018) 6 SCC 422 : 2018 SCC OnLine SC 352
5) 2025 SCC OnLine SC 975
6) AIR 2021 SC 4594
7) AIR 1977 SC 2421
8) AIR 2004 SC 1373
9) AIR 1986 SC 1253
10) 2023 Live Law (SC) 372
This Court made the following:
Page 3 of 22
APHC010427622025
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3331]
(Special Original Jurisdiction)
FRIDAY, THE THIRTY FIRST DAY OF OCTOBER
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICE SUBBA REDDY SATTI
CIVIL REVISION PETITION NO: 2156/2025
Between:
1. GRUHALAKSHMI FINANCE, , SRIKAKULAM A REGISTERED
FIRM, REP.BY ITS MANAGING PARTNER SRI V.SARVESWARA
RAO.
2. V.SARVESWARA RAO,, S/OLATE SATYANARAYANA, AGED 64
YEARS, HINDU, BUSINESS, VSR COLONY TOWN HALL ROAD,
SRIKAKULAM.
...PETITIONER(S)
AND
1. ANDAVARAPU GOVINDARAJULU, S/O LATE SATYANARAYANA
HINDU, AGED 65 YEARS, BUSINESS, SRIKAKULAM.
2. TALASU MURALI, S/O. VENKATESAM, HINDU, AGED 51
YEARS, MAHARANIPETA, KT ROAD KASIBUGGA, PALASA
MANDAL.
3. SAKALABATTULANAGESWARARAO, S/O LATE SANKARA
NARAYANA, HINDU, AGED 60 YEARS, CHINABARALAM
STREET, SRIKAKULAM.
4. MONANGI RAMJI, S/O. NARASIMHAMURTY, HINDU, AGED 54
YEARS. BUSINESS, KRANTHI ABODE, AMUDALAVALASA.
Page 4 of 22
5. ANDAVARAPUGOVINDARAO, S/O TRINADHAM AGED 66
YEARS, HINDU, BUSINESS, PN COLONY, SRIKAKULA
6. POTNURU SRIDHAR, S/O LATE HARAGOPALAM, HINDU,
AGED 50 YEARS, ASM COLONY, SRIKAKULAM.
7. KANDULA KASI VISWANADHAPRASAD,
S/O.DHANUNJAYARAO, AGED 50 YEARS. MAIN ROAD,
SOMPETA.
8. PILLALANEELADRIRAO, S/O, SRIRAMAMURTY, AGED 63
YEARS. BUSINESS, GUDI VEEDHI, SRIKAKULAM.
9. KORADA APPARAO, S/O.LATENEELAKANTAM, HINDU, AGED
66 YEARS. WOMEN'S COLLEGE ROAD SRIKAKULAM.
...RESPONDENT(S):
Petition under Article 227 of the Constitution of India, praying that in
the circumstances stated in the grounds filed herein, the High Court may
be pleased to set-aside the order dated 21.04.2025 in I.A.No.184/2023 in
O.S.No.40/2022 (On the file of III Additional District-cum-family Court at
Srikakulam)
IA NO: 1 OF 2025
Petition under Section 151 CPC praying that in the circumstances
stated in the affidavit filed in support of the petition, the High Court may
be pleased to stay the order passed in IA. No.184 of 2023 in O.S. No.40
of 2022 dated 21.04.2025 On the file of FAMILY COURT CUM III RD
ADDL DISTRICT JUDGE at Srikakulam) and allowing the CRP in the
interest of justice failing which the petitioner / Defendants put to
irreparable loss and injury in the above matter and pass
Counsel for the Petitioner(S):
1. VYAS VENKATESH
Counsel for the Respondent(S):
1. MSVS SUDHA RANI
Page 5 of 22
The Court made the following:
ORDER
Defendants 1 and 2 in the suit, filed the above revision assailing the order, dated 21.04.2025, in I.A.No.184 of 2023 in O.S.No.40 of 2022, on the file of the Judge, Family Court-cum-III Additional District and Sessions Judge, Srikakulam.
2. The parties to the revision are referred to as per their status in the suit O.S.No.40 of 2022.
3. The plaintiffs filed suit O.S.No.40 of 2022 on the file of Judge, Family Court-cum-III Additional District and Sessions Judge, Srikakulam, seeking the following reliefs:
(a) To order for the dissolution of 1st defendant firm M/s Gruhalaxmi Finance., and to direct the 1st respondent to render the accounts right from the date of its inception, including the plaint schedule property of the 1st defendant firm till the date of dissolution as the plaintiffs are continuing partners of the said firm;
(b) For grant of permanent injunction restraining the defendants from alienating or altering the plaint schedule property till the completion of proceedings of this suit;
(c) For costs of the suit; and
(d) For such other relief or reliefs which the Honourable Court deems fit and proper in the circumstances of the case in the ends of justice.
4. (a) In the plaint, it was contended, interalia, that the plaintiffs, along with defendants 2 to 9, floated the 1st defendant firm under a registered partnership deed dated 27.09.1996 (in the cause of action, it was Page 6 of 22 mentioned as 26.07.1997). The firm was reconstituted with the plaintiffs and defendants on 01.10.1998. Plaintiffs hold 12% and 7% shares, respectively. The plaint schedule property was purchased under three registered sale deeds dated 26.07.1997, 29.07.1997, and 30.09.1997 in the name of the 1st defendant firm, represented by the Managing Partner, 2nd defendant.
(b) During May 2002, plaintiffs and the 8th defendant expressed their willingness to retire from the 1st defendant firm by referring the matter for settlement to two arbitrators by name Lanka Bavajeenaidu and Putta Anjani Kumar. Accordingly, on 24.05.2002, the defendants 2 and 7 agreed to settle the accounts. The arbitrators prepared a deed showing that the plaintiffs and the 8th defendant as retiring partners and defendants 2 and 7 as continuing partners. The plaintiffs and the 8th defendant demanded to settle the accounts. The defendants 2 and 7, without fixing the date for settlement of accounts, asked the plaintiffs, the 8th defendant and other partners to sign on to the partnership dated 25.04.2002. Plaintiffs and the 8th defendant have not signed the partnership deed dated 25-4-2002, as it was drafted without finalisation of accounts, and the said transaction was not completed.
(c) The 2nd defendant, the Managing Partner of D1, used to get the signatures of other partners on blank stamp papers and white papers to suit his convenience and the transactions of the firm. The 2nd defendant prepared a reconstituted partnership deed dated 24.05.2002 on some of the blank papers on which signatures of some of the partners i.e. plaintiffs and 8th defendant, were obtained, eliminating the signatures of other partners. The blank signed papers were utilised for due notification of alleged reconstitution before the Registrar of Firms, Form-V, and the Page 7 of 22 signatures of each partners on blank papers were used as affidavits of plaintiffs and defendants 3 to 6, 8 & 9 in suit O.S.No.263 of 2003 on the file of Additional Junior Civil Judge, Srikakulam, and also to file a memo in the said suit, filed by the plaintiffs and 8th defendant against D2 and D7. In the said suit, a temporary injunction was granted in I.A.No.218 of 2003 restraining the defendants 2 and 7 from alienating the plaint schedule property, and later the suit was disposed of. The reconstituted partnership deed dated 24.05.2002 was attested by Muddada Krishna Murthy Naidu and Rajapatruni Vijaya Ramakrishna, the close associates of the 2nd defendant. Form-V was attested by Chartered Accountant Baratam Srirama Murthy, and he had not witnessed any other partner signing Form-V.
(d) In suit O.S.No.263 of 2003, it was pleaded that the plaintiffs had not signed the alleged reconstituted partnership deed dated 24.05.2002 and the retirement deed dated 21.05.2002, and thus they do not bind them. Plaintiffs have been continuing as partners in the 1st defendant firm. The 2nd defendant sold several properties standing in the name of the 1st defendant, except the plaint schedule property, due to the injunction.
(e) As per the recitals in the partnership deed, the profit and loss shall be adjusted by the end of 31st March, and payment of remuneration of Rs.5,000/- per annum to the active partners. Plaintiffs and the 8th defendant are entitled to receive the remuneration; however, the 2nd defendant failed to comply with the above terms and conditions. The 2nd defendant, in the balance sheet, shows the amounts due from the plaintiffs, defendants 3 to 6, 8 and 9. The alleged reconstituted partnership deed dated 24.05.2002 will not create any bar on the rights of Page 8 of 22 plaintiffs or defendants 3 to 6, 8 and 9 to claim dues from the 1 st defendant firm towards settlement of accounts.
(f) The defendants 3 to 6 filed suit O.S.No.18 of 2008 on the file of Additional Senior Civil Judge, Srikakulam, against the plaintiffs and other defendants to declare that they are continuing partners in the 1st defendant firm and for dissolution of the firm etc. In the said suit, the 1st plaintiff, being the 3rd defendant, filed a written statement. The said suit was dismissed on 11.09.2017 for non-prosecution; however, the plaintiffs therein did not take any steps to restore the suit. After dismissal of the suit O.S.No.18 of 2008, the plaintiffs, along with other partners and elders, approached the 2nd defendant for the settlement of accounts; however, the 2nd defendant has been postponing the same. Thus, the suit was filed for the reliefs stated supra.
5. Pending the suit, the defendants 1 and 2 filed I.A.No.184 of 2023 under Order VII Rule 11 and Section 151 of CPC to reject the plaint. The principal grounds on which the I.A. was filed are that the suit O.S.No.40 of 2022 is barred by limitation, as also under Order II Rule 2 of CPC.
6. The 1st plaintiff filed a counter, and the same was adopted by the 2nd plaintiff.
7. The trial Court, by order dated 21.04.2025, dismissed the application. Assailing the same, the above revision is filed.
8. Heard Sri Venkatesh Vyas, learned counsel for the petitioner and Smt.M.S.V.S.Sudharani, learned counsel for the respondents 1 and 2.
9. Learned counsel for the petitioners would contend that the suit filed by the plaintiffs, for the reliefs stated supra, is barred by limitation and Page 9 of 22 there is no cause of action. Even as per the averments in the plaint, a new partnership firm was reconstituted on 24.05.2002, and the plaintiffs are aware of said reconstitution. The plaintiffs, having pleaded fraud and misrepresentation regarding the retirement and reconstitution of a partnership firm by a document dated 24-5-2002, should have filed the suit immediately to cancel the document dated 24.05.2002 and for other ancillary reliefs. He would also submit that the plaintiffs are aware of the reconstituted partnership deed dated 24.05.2002, in view of the affidavit filed in O.S.No.263 of 2003. He would finally submit that the suit O.S.No.40 of 2022 is barred by Order II Rule 2 CPC; however, the trial Court failed to consider the said aspect.
10. Smt.M.S.V.S.Sudharani, learned counsel for the respondents 1 & 2 would submit that the suit O.S.No.40 of 2022 filed by the plaintiff is within the limitation. She would also submit that the signatures of plaintiffs and other partners were obtained by playing fraud and misrepresentation, and the alleged reconstituted partnership deed dated 24.05.2002 is not valid and binding on the plaintiffs and other partners. She would also submit that the 2nd defendant, being the Managing Partner, obtained signatures on blank papers. She would also submit that the limitation is a mixed question of law and fact, and the suit cannot be rejected on that ground, and the parties must let in evidence.
11. Learned counsel for the petitioner relied upon Dahiben Vs. Arvindbhai Kalyanji Bhanusali1, and Shri Mukund Bhavan Trust and Others Vs. Shrimant Chhatrapati Udayan Raje Pratapsinh Maharaj Bhonsle and Another2.
1(2020) 7 SCC 366 : 2020 SCC OnLine SC 562 2 2024 SCC OnLine SC 3844 Page 10 of 22
12. On the other hand, learned counsel for the respondents relied upon P.V. Guru Raj Reddy Vs. P. Neeradha Reddy3 and Chhotanben Vs. Kiritbhai Jalkrushnabhai Thakkar4.
13. Now, the point for consideration is:
Whether the order dated 21.04.2025 in I.A.No.184 of 2023 in O.S.No.40 of 2022 on the file of the Judge, Family Court- cum-III Additional District and Sessions Judge, Srikakulam, suffers from any illegality, warranting the interference of this Court?
14. Before delving into the legal aspects, let this Court first examine the scope and ambit of the application filed under Order VII Rule 11 of CPC.
15. It is a well-settled proposition of law that rejection of the plaint under Order VII Rule 11 of CPC is a drastic power available to the Court at the threshold, and therefore, the Court, while considering the said application, shall go by the averments in the plaint alone. The claim of the plaintiff concerning knowledge of the essential facts giving rise to the cause of action needs to be accepted as correct. The stand of the defendant in the written statement is wholly immaterial. If the plaint ex facie does not disclose a cause of action or a plain reading of the plaint it appears that the relief is barred by limitation, then only the plaint can be rejected. When the foundation of facts as pleaded attracts the bar of limitation, no trial is warranted.
3(2015) 8 SCC 331 : 100 : 2015 SCC OnLine SC 118 4 (2018) 6 SCC 422 : 2018 SCC OnLine SC 352 Page 11 of 22
16. In P.Kumarakurubaran Vs. P.Narayanan and Others 5 , the Hon‟ble Apex Court held that when the foundational facts, as pleaded, squarely attract the bar of limitation, no trial is warranted and the suit is liable to be dismissed at the threshold.
17. In Mukund Bhavan Trust case (supra-2), the Hon‟ble Apex Court held that the spirit and intention of Order VII Rule 11(d) of CPC is only for the Courts to nip it in the bud when any litigation ex facie appears to be a clear abuse of process.
18. The Hon‟ble Apex Court, in fact, in P.Kumarakurubaran's case (supra-5), held that when the question of limitation involves disputed facts or hinges on the date of knowledge, such issues cannot be decided at the stage of Order VII Rule 11 CPC.
19. In Chhotanben's case (supra-4), a 3-Bench Judge of the Hon‟ble Apex Court held that the plea regarding the date on which the plaintiffs gained knowledge of the essential facts is crucial for deciding the question whether the suit is barred by limitation or not. It becomes a triable issue and hence the suit cannot be thrown out at the threshold. The defendant in a suit cannot pick up a few sentences here and there from the plaint and contend that the plaintiffs had constructive notice of the proceedings and that, therefore, the limitation started running from the date of constructive notice.
20. The plaint runs into 12 pages, divided into paras „a‟ to „n‟. One should not be oblivious of the difference between a „fact‟ and „fact in issue‟. A question of „fact‟ is different from the „fact in issue‟. A fact in 5 2025 SCC OnLine SC 975 Page 12 of 22 issue, which is the principal dispute, needs to be culled out to decide the application under Order VII Rule 11 CPC within the framework as enunciated in the clauses. Every Court adjudicates the fact in issue while taking into consideration the totality of the facts.
21. In the case at hand, going by the averments in the plaint, initially the partnership firm was constituted in the name of M/s Gruhalakshmi Finance under a registered partnership deed dated 27.09.1996, and thereafter it was reconstituted on 01.10.1998. The property was acquired in the name of the firm under 3 registered documents. Since an application is filed by the D1 and D2 to reject the plaint, keeping in mind the expression of the Apex Court, let this court examine the issue as well as the correctness of the order passed by the trial court. To adjudicate the same, it is necessary to extract some relevant portions from the plaint.
22. In Para-III (c) of the plaint, the plaintiffs pleaded about their intention to retire from the 1st defendant firm; referring the matter to the arbitrators and preparation of a deed of partnership dated 24.05.2002 showing the plaintiffs and 8th defendant as retiring partners and the defendants 2 and 7 are continuing partners. In the same paragraph, it was pleaded that the plaintiff and the 8th defendant have not signed on the reconstituted partnership deed dated 24.05.2002, as it was drafted without finalisation of the accounts. Thus, in Para-III (c), plaintiffs clearly asserted that they did not sign the reconstituted partnership deed dated 24.05.2002.
23. From Para-III (d) onwards, the plaintiffs pleaded about the alleged practice of the 2nd defendant in obtaining their signatures on blank stamp papers and blank white papers.
Page 13 of 22(e) ... the 2nd defendant got prepared the alleged reconstituted partnership deed dated 24.05.2002 on some of the blank papers on which the signatures of some of the partners i.e. plaintiffs and 8 th defendant were obtained eliminating the signatures of the other partners ... .... The blank papers on which the signatures of all the papers were obtained and preserved well in advance by the 2 nd defendant were utilized for the due notification of the alleged reconstitution before the Registrar of Firms, which is known as Form-V, the separate blank papers on which the signatures of each individual partner which were obtained by the 2nd defendant well in advance and preserved by him were utilized for the purpose of the individual alleged affidavits of plaintiffs, 3 to 5, 8 and 9 defendants stating that they have retired from the above 1st defendant firm, for the purpose of the suit i.e. O.S.No.263 of 2003 on the file of Additional Junior Civil Judge, Srikakulam and also a memo that alleged to be filed by 1 st plaintiff herein in the suit i.e. O.S.No.263 of 2003 on the file of Additional Junior Civil Judge, Srikakulam, stating that the 1st plaintiff is not having interest in the subject matter of that suit ...
.... The 1st defendant also obtained the photos of some of the partners inducing them to believe that the said photos were necessary in dealing with the affairs of the 1st defendant firm, and the photo of the 1st plaintiff obtained in the above process was affixed to the said memo.
(g) ... the alleged reconstituted partnership deed dated 24.05.2002 was to be attested by Muddada Krishna Murthy Naidu and Rajapatruni Vijaya Rama Krishna. The said Muddada Krishna Murthy Naidu is a close associate of 2nd defendant and partner in some of the businesses of 2nd defendant and said 2nd attestor of the said deed is the henchmen, supporter, follower of the 2nd defendant and both the attestors are acting at the dictates of 2nd defendant in expectation of some benefit ...
Page 14 of 22.... The Form-V i.e. the alleged due notification to be filed before Registrar of Firms which was alleged to be attested by the Chartered Accountant by name Barata Srirama Murthy who had not witnessed any of the partners signing on the said Form-V which was a concocted document on which the signatures of all the partners were obtained by the 2nd defendant when the paper was in blank and subsequently it was filled up as Form-V to suit the convenience of the 2 and 7 defendants and in fact the alleged chartered accountant had not attested the same in the presence of the plaintiffs, 3 to 6, 8 and 9 defendants.
(h) ... ... As the reconstituted deed of partnership was prepared on blank white papers and blank stamp papers without mentioning the date of purchase of the stamps on which the signatures of the plaintiffs and 8th defendant were obtained in advance when they are having with the 2nd defendant to cause loss to them by the 2 nd defendant, they pleaded in their plaint in O.S.No.263 of 2003 that they have not signed on the alleged reconstituted partnership deed dated 24.05.2002 and the alleged reconstituted retirement dated 21.05.2002 is not binding on the plaintiffs and 8th defendant as they have not signed on it and it is a concocted document and as per version of the plaintiffs and 8 th defendant the question of execution of the said document on alleged date 24.05.2002 does not arise, as they have not signed on it after it was prepared and still they are the continuing partners of the 1 st defendant firm and as per law the rest of the formalities after the alleged execution of the alleged retirement deed if at all true should be complied with ..."
(j) As per the averments in the partnership deed the resultant profit and loss shall be adjusted to the respective accounts by the end of 31st March. The active partners are entitled for payment of Rs.5,000/- and 18% per annum interest on the outstanding capital of the partners. All these terms were not complied with by the 2 nd defendant and acted Page 15 of 22 as a sole monarch without giving remuneration, without crediting the respective profits to the partners, and without crediting interest on capitals as agreed ... ... It alleged reconstituted deed dated 24.05.2002, 1st defendant firm by will not create any bar on the right of the plaintiffs or 3 to 6, 8 and 9 defendants to claim the amounts due from the 1st defendant firm to them by settlement of accounts ...
(k) It was further pleaded about the suit filed by the 3 to 6 defendants i.e. O.S.No.18 of 2008 and the written statement filed by 1 st defendant in the present suit, being 3rd defendant in that suit and dismissal of the said suit on 11.09.2017 for non-prosecution etc."
24. Thus, a scrutiny of the extracted portions from the plaint, the plaintiffs pleaded fraud and misrepresentation in getting their signatures on blank stamp papers and white papers by the Managing Partner, 2nd defendant in the suit in creating a reconstituted partnership deed dated 24-5-2002. A complete reading of the plaint demonstrates that the Plaintiffs are aware of the alleged fraud and reconstituted partnership deed dated 24.05.2002, in the first instance, in the suit O.S.No.263 of 2002 and in the second instance, in the suit O.S.No.18 of 2008.
25. The plaintiffs, being conscious of the said document dated 25.04.2002, for the reasons best known, did not challenge the validity or otherwise of the same till this day. Without challenging the same, the present suit was filed seeking to dissolve the 1st defendant firm, rendition of accounts and other ancillary reliefs.
26. It is also not the case of the plaintiffs, as per the averments in the plaint, that the 2nd defendant adjusted the resultant profit and loss and also paid the remuneration to the active partners after 25.04.2002, till the filing of the suit. The entire plaint is silent on this aspect. In fact, as per Page 16 of 22 the prayer, the plaintiffs are asking for the rendition of accounts from the beginning. It is not the case of the plaintiffs that they came to know about the alleged fraud played by the 2nd defendant very recently and filed the present suit. The present suit was filed two decades after the reconstitution of the 1st defendant firm on 24.05.2002. However, this court is not recording any finding vis-à-vis the limitation, in that regard, in the C.R.P.
27. Thus, a perusal of the averments in the plaint would indicate that the plaintiffs retired from the partnership by virtue of the reconstitution deed dated 24.05.2002. That being the scenario, once the plaintiffs retired from the partnership, whether the suit filed by the plaintiffs claiming dissolution of defendant No.1 firm and for rendering the accounts right from the date of its inception, is maintainable, needs to be examined.
28. In Rajendra Bajoria Vs. Hemant Kumar Jalan and others6, the Hon‟ble Supreme Court considered an identical issue and rejected the plaint. The facts of said case are that the plaintiffs therein filed C.S.No.79 of 2017 seeking different reliefs, including dissolution of the firm and rendition of accounts etc. The defendants therein filed two interlocutory applications seeking dismissal of the suit or, in the alternative, to reject the plaint on the ground, the plaint does not disclose any cause of action and the relief as claimed in the plaint could not be granted. The defendants also pleaded that the suit filed by the plaintiffs is beyond the period of limitation. Learned Single Judge dismissed the interlocutory applications with certain observations. The defendants filed appeals before the Division Bench. The Division Bench allowed the appeals and 6 AIR 2021 SC 4594 Page 17 of 22 rejected the plaint. Aggrieved by the same, appeals were filed before the Hon‟ble Apex Court, and they were dismissed.
29. The Hon‟ble Apex Court, by referring to the decisions in T.Arivandandam Vs. T.V. Satyapal and another7 and Pearlite Liners (P) Ltd. Vs. Manorama Sirsi 8 , observed at paras 15 and 17 that a reading of the averments made in the plaint it should not only be formal but also meaningful. If a clever drafting has created the illusion of a cause of action, and meaningful reading thereof would show that the pleadings are manifestly vexatious and meritless, in the sense of not disclosing a clear right to sue, then the Court should exercise its power under Order VII Rule 11 of C.P.C. The Court must find out as to whether, in the background of the facts, the relief, as prayed in the plaint, can be granted to the plaintiff. If the Court finds that none of the reliefs claimed in the suit can be granted under the law, the question then arises as to whether such a suit is to be allowed to continue and go for trial. Such a suit should be thrown out at the threshold.
30. The Hon‟ble Apex Court in Aravindandam's case (supra-7), observed at Para No.5, as follows:
"5. We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentently resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif's Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful -- not formal
-- reading of the plaint it is manifestly vexatious, and meritless, in 7 AIR 1977 SC 2421 8 AIR 2004 SC 1373 Page 18 of 22 the sense of not disclosing a clear right to sue, he should exercise his power under Order 7, Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order 10, CPC. An activist Judge is the answer to irresponsible law suits. The trial courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men, (Cr. XI) and must be triggered against them. In this case, the learned Judge to his cost realised what George Bernard Shaw remarked on the assassination of Mahatma Gandhi:
"It is dangerous to be too good."
31. In Pearlite Liners (P) Ltd.'s case (supra-8), the Hon‟ble Apex Court, at para No.10 observed as under:
"10. The question arises as to whether in the background of the facts already stated, such reliefs can be granted to the plaintiff. Unless there is a term to the contrary in the contract of service, a transfer order is a normal incidence of service. Further, it is to be considered that if the plaintiff does not comply with the transfer order, it may ultimately lead to termination of service. Therefore, a declaration that the transfer order is illegal and void, in fact amounts to imposing the plaintiff on the defendant in spite of the fact that the plaintiff allegedly does not obey order of her superiors in the management of the defendant Company. Such a relief cannot be granted. Next relief sought in the plaint is for a declaration that she continues to be in service of the defendant Company. Such a declaration again amounts to enforcing a contract of personal service which is barred under the law. The third relief sought by the Page 19 of 22 plaintiff is a permanent injunction to restrain the defendant from holding an enquiry against her. If the management feels that the plaintiff is not complying with its directions it has a right to decide to hold an enquiry against her. The management cannot be restrained from exercising its discretion in this behalf. Ultimately, this relief, if granted, would indirectly mean that the court is assisting the plaintiff in continuing with her employment with the defendant Company, which is nothing but enforcing a contract of personal service. Thus, none of the reliefs sought in the plaint can be granted to the plaintiff under the law. The question then arises as to whether such a suit should be allowed to continue and go for trial. The answer in our view is clear, that is, such a suit should be thrown out at the threshold. Why should a suit which is bound to be dismissed for want of jurisdiction of a court to grant the reliefs prayed for, be tried at all? Accordingly, we hold that the trial court was absolutely right in rejecting the plaint and the lower appellate court rightly affirmed the decision of the trial court in this behalf. The High Court was clearly in error in passing the impugned judgment whereby the suit was restored and remanded to the trial court for being decided on merits. The judgment of the High Court is hereby set aside and the judgments of the courts below, that is, the trial court and the lower appellate court are restored. The plaint in the suit stands rejected."
32. In Rajendra Bajoria's case (supra-6), the Hon‟ble Apex Court, also referred to the decision in Azhar Hussain Vs. Rajiv Gandhi9 and considered Section 40 of the Partnership Act, regarding dissolution by an agreement. The Hon‟ble Apex Court confirmed the finding of the Calcutta High Court that only a partner of a firm can seek dissolution of 9 AIR 1986 SC 1253 Page 20 of 22 a firm in view of Section 40 of the Partnership Act. The Division Bench of the Kolkata High Court, while rejecting the plaint observed as follows:
"Thus, it is clear that it is only a partner of a firm who can seek dissolution of the firm. The dissolution of a firm cannot be ordered by the court at the instance of a non partner. Hence, the plaintiffs are not entitled to claim dissolution of the said firm. Consequently, they are also not entitled to pray for accounts for the purpose of dissolution of the firm."
33. In the case at hand, as observed supra, the reading of the entire plaint, it would manifest that the partnership was reconstituted by deed dated 24.05.2002. The plaintiffs in the suit were aware of the said reconstitution when they filed O.S.No.263 of 2003, and the suit O.S.No.18 of 2008, filed by defendants 3 to 6. The plaintiffs, as per the averments, cannot claim the status of the partners of the D1 firm. Of course, this court is not giving any finding regarding the alleged fraud or misrepresentation said to have been made by D2. The plaint was clearly drafted to suit the relief.
34. In Ramisetty Venkatanna and another Vs. Nasyam Jamal Saheb and others10, the Hon‟ble Apex Court by referring to a number of authorities on the aspect that a plaint can be rejected if the same is vexatious and held as under at para No.6:
"Applying the law laid down by this Court in the aforesaid decisions on the applicability of Order VII Rule XI to the facts of the case on hand, we are of the opinion that the plaint ought to have been rejected in exercise of powers under Order VII 10 2023 Live Law (SC) 372 Page 21 of 22 Rule XI(a) and (d) of CPC being vexatious, illusory cause of action and barred by limitation."
35. As discussed supra, the plaintiffs, as per the averments in the plaint, are not the partners of 1st defendant firm by virtue of the reconstitution deed, dated 24.05.2002. Having pleaded about the reconstitution deed, dated 24.05.2002, as discussed supra, the validity of the same was not challenged before the Court. Having been pleaded, the document is not made as one of the list of documents.
36. The trial Court, by applying 14(1) of the Limitation Act, dismissed the application as if the suit O.S.No.18 of 2008 filed by defendants 3 to 6 was in the wrong forum. In fact, defendants 3 to 6 filed O.S.No.18 of 2008 seeking dissolution of the firm and to render the accounts, before the proper forum, wherein the present plaintiffs were arrayed as party defendants along with others. Going by the plaint averments, the suit O.S.No.18 of 2008 was dismissed for non-prosecution on 11.09.2017.
37. Thus, the trial Court, in the opinion of this Court, failed to exercise the jurisdiction vested with it. Since the trial Court failed to exercise the jurisdiction vested with it, the order passed by the trial Court brooks interference while exercising jurisdiction under Article 227 of the Constitution of India.
38. Accordingly, this Civil Revision Petition is Allowed. The order dated 21.04.2025, in I.A.No.184 of 2023 in O.S.No.40 of 2022, on the file of the Judge, Family Court-cum-III Additional District and Sessions Judge, Srikakulam, is set aside. I.A.No.184 of 2023 stands allowed. Consequently, the suit O.S.No.40 of 2022 on file court of the Family Court Page 22 of 22 cum III Addl District and Sessions Judge, Srikakulam, is hereby rejected under Order VII Rule 11 C.P.C. No costs.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
___________________________ JUSTICE SUBBA REDDY SATTI PVD/IKN