Karnataka High Court
Sri.P.Ashwin Pai vs Suma T Gowda on 16 October, 2020
Bench: Aravind Kumar, Shivashankar Amarannavar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF OCTOBER 2020
PRESENT
THE HON'BLE MR. JUSTICE ARAVIND KUMAR
AND
THE HON'BLE MR.JUSTICE SHIVASHANKAR AMARANNAVAR
WRIT PETITION NO.10555/2020 (GM-CON)
BETWEEN:
SRI P. ASHWIN PAI
AGED ABOUT 40 YEARS,
S/O SRI SATISH PAI,
LAKSHMINARAYANA COMPLEX,
NO.10/1, PALACE ROAD,
BENGALURU - 560 001.
... PETITIONER
(BY SRI ARAVIND KAMATH, SENIOR COUNSEL FOR
SRI CHANDAN K., ADVOCATE)
AND:
1. SUMA T. GOWDA,
D/O MR. H.R. THIMMAPPA GOWDA,
AGED ABOUT 34 YEARS,
R/AT NO.2125, MIG, SAPTAGIRI,
3RD PHASE, 12TH B MAIN ROAD,
YELAHANKA NEW TOWN,
BANGALORE - 64,
REP. BY ITS HER POA
MR. H.R. THIMMAPPA GOWDA.
2. M/S. WATER FRONT DEVELOPERS,
A PARTNERSHIP FIRM HAVING ITS OFFICE
AT NO.4406/7/8 HIGH POINT IV,
45, PALACE ROAD,
BANGALORE - 560 001
REP. BY ITS MANAGING DIRECTOR.
2
3. M/S. ETERNITY DEVELOPERS,
REGD OFFICER AT NO.11,
HAYES ROAD,
BANGALORE - 560 025,
REP. BY ITS DIRECTOR,
MR. AVINASH PRABHU AND
MR. DHIRAJ PRABHU.
4. M/S. HIGH POINT FINANCE
PRIVATE LIMITED,
A PRIVATE LIMITED COMPANY
AT NO.4406/4/8,
HIGH POINT IV, 45,
PALACE ROAD,
BANGALORE - 560 001
REP. BY ITS MANAGING DIRECTOR
MR. SURESH BHATIA.
... RESPONDENTS
(BY SRI S.B. TOTAD, ADVOCATE FOR R1;
SERVICE OF NOTICE ON R2 TO R4 IS
DISPENSED WITH V/O DATED 29.09.2020)
*****
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
SET ASIDE AN ORDER DATED 10.07.2018 PASSED BY THE
STATE COMMISSION BY ALLOWING THE IMPLEADING
APPLICATION FILED BY R1 AS DECREE HOLDER UNDER
ORDER 1 RULE 10 R/W ORDER XXI RULE 50 AND SECTION
151 OF CODE OF CIVIL PROCEDURE, 1908 IN EX. CASE
NO.10/2016 TO IMPLEAD THE PETITIONER AS JUDGMENT
DEBTOR NO.4. THE IMPUGNED ORDER DATED 10.07.2018
IS PRODUCED AT ANNEXURE-A AND THE APPLICATION
FILED BY R1 IS PRODUCED AS ANNEXURE-D AND ETC.
3
THIS WRIT PETITION COMING ON FOR PRELIMINARY
HEARING THIS DAY, ARAVIND KUMAR. J., MADE THE
FOLLOWING:
ORDER
Heard Sri. Aravind Kamath, learned Senior Counsel appearing for petitioner and Sri.S.B.Totad, learned counsel appearing for respondent No.1. Perused the records. Notice to respondent Nos.2 to 4 has been dispensed with vide order dated 29.09.2020.
2. Order dated 10.07.2018 (Annexure-A) whereunder an application filed under Order 1 Rule 10 r/w Order XXI Rule 50 and Section 151 CPC in execution proceedings came to be allowed and petitioner has been impleaded as fourth judgment debtor in Execution Case No.10/2016 in Consumer Complaint No.169/2014, is under challenge and before this court questioning the legality of said order.
3. It is the contention of Sri.Aravind Kamath, learned Senior Counsel appearing for petitioner that Karnataka State Consumer Disputes Redressal Commission, Bangalore (for short 'State Commission') 4 committed a serious error in impleading the petitioner as a party to the execution proceedings on the ground that petitioner is a partner of the firm, though records produced before the State Commission clearly indicate that petitioner had retired from the firm way back on 31.03.2012 and even according to the complainant i.e., decree holder, the cause of action for filing the complaint had arisen on 15.04.2014 i.e., much later to the date of retirement of petitioner from the partnership firm and as such, without considering this factual aspect State Commission erred in allowing the application. He would elaborate his submission by contending that even otherwise the expression used under Order 1 Rule 10(2) CPC would indicate that court can strike out or add parties "at any stage of the proceedings" would mean at the stage of adjudication of original proceedings or at the appellate stage only and not at the stage of executing the decree, inasmuch as, executing court cannot travel beyond the decree. Relying upon two (2) judgments of the Andhra Pradesh High Court i.e., CHAGANTI LAKSHMI RAJYAN AND OTHERS vs. KOLLA RAMA RAO (in 5 C.R.P.No.2144 and 2558/1997, decided on 22.12.1997) and VAGGU AGAMAIAH AND OTHERS vs. SOUTH CENTRAL RAILWAY, SECUNDERABAD AND OTHERS (C.R.P.NO.725/1999, decided on 18.09.2001 he has sought for allowing the writ petition by dismissing the application for impleading filed by respondent-decree holder.
4. Per contra, Sri.S.B.Totad, learned counsel appearing for respondent No.1 would support the impugned order and would contend that application having been filed under Order 1 Rule (10) r/w Order 21 Rule 50, State Commission has given a finding as to how petitioner being partner of the firm would be liable to indemnify the liabilities of the partnership firm and even otherwise, retirement of petitioner from the firm being contrary to Indian Partnership Act, 1932 and not being retirement in the eye of law and being a camouflage namely, created to stave off the claim of the decree- holder, said plea of writ petitioner was not accepted by the commission. He has contended that impugned order 6 is appealable under Section 19 of the Consumer Protection Act and as such, writ petition is liable to be dismissed. Hence, he prays for dismissal of the petition.
5. It is no doubt true that availability of alternate remedy is a ground on which inherent jurisdiction or extraordinary jurisdiction would not be exercised by writ court. However, exception to the said Rule is where vires of a statutory provision is under challenge or where the impugned order is passed by an Authority which does not have jurisdiction or where by the impugned order a jurisdictional error has been committed by the said Authority or where said order is in violation of principles of natural justice, this court would exercise the extraordinary jurisdiction vested in it.
6. In the instant case, impleading of petitioner in the execution proceedings is under challenge on the ground of lack of jurisdiction to the State Commission to exercise such power. Hence, we are not inclined to accept the submission made by learned counsel for first respondent and same is overruled.
7
7. Respondent herein who is the decree holder filed E.P.No.10/2016 under Section 25 of the Consumer Protection Act, 1986, for executing the order dated 31.03.2016 passed by the State Commission in Complaint No.169/2014. Initially execution petition came to be filed only against judgment debtor Nos.1 and
2. During pendency of said execution proceedings, an application came to be filed by the decree holder under Order I Rule 10 of CPC r/w Order XXI Rule 50 of CPC and to implead "M/s. High Point Finance Private Limited" (judgment debtor No.3) and Mr.P.Ashwin Pai, present writ petitioner on the ground that they were partners of the Firm against whom the decree has been passed and they being the partners of the firm, cannot be absolved of their liability. Said application came to be opposed by the present petitioner by filing statement of objections (Annexure-E) specifically contending that he had retired from the partnership firm way back on 31.03.2012 and he is not liable/responsible to answer the claim made by the decree holders against the firm by 8 relying upon three (3) documents. It was also contended that petitioner is neither a necessary nor proper party to the execution proceedings. A memo came to be filed in the execution proceedings enclosing the letter of retirement issued by him to the firm. The State Commission, as noticed hereinabove, after having noticed rival contentions has allowed the application.
8. Having heard the learned Advocates appearing for parties and on perusal of records, it would disclose that undisputably the complaint came to be filed by the decree holder only against M/s. Water Front Developers and M/s. Eternity Developers (judgment debtor Nos.1 & 2). At paragraph-25 of the complaint, they have alleged that cause of action for filing the complaint had arisen in January 2013 when respondents had failed to deliver apartments and again on 15.04.2004 when opposite party had delayed in handing over possession. Hence, it was contended by the complainant that same is attributable to the respondent Nos.1 & 2 therein. Contending, that 9 judgment debtor is a Partnership Firm comprising of three (3) partners i.e., second judgment debtor and the proposed applicants who were sought to be impleaded in the execution proceedings are necessary and proper party, complainants sought for applicants being impleaded in execution proceedings. Said application was opposed to by the writ petitioner herein by filing objections, contending he had retired from the first judgment debtor firm on 31.03.2012. To evidence this fact, he has produced the deed of retirement dated 31.03.2012 and extract of Form-A issued by the Registrar of Firms vide Annexures-G and H respectively. Prima facie, it would indicate that petitioner retired from the firm-M/s.Water Front Developers on 31.03.2012.
9. Under sub-rule (2) of Order 10, the court is empowered to strike out or add on parties at any stage of the proceedings either on an application made by the parties or otherwise, direct impleadment of any person as party; who ought to have joined as plaintiff or defendant, or whose presence before the court is 10 necessary to effectively and completely adjudicate upon and settle all the questions involved in the suit. The expression "at any stage of the proceedings"
occurring in Rule (2) of Order X would acquire significance, inasmuch as, in the present facts obtained, petitioner was sought to be impleaded during execution proceedings. At any stage of proceedings, by itself is very clear that it means, at any stage of proceedings till passing of the final decree in a suit.
10. Hon'ble Apex Court in the case of CALCUTTA PORT TRUST AND ANOTHER V. DEBA PROSAD BAG reported in 1995 Supp (1) SCC 454 has held that expression "at any stage of proceedings", however does not mean that persons who are not parties before the High Court is permitted to join the proceedings before the Supreme Court. In fact, the parties can be impleaded after preliminary decree. However, such impleadment is permissible only if none of the questions already settled by preliminary decree would be reopened by the court for addition of parties.
11
11. As to whether a party can be impleaded in execution proceedings where decree is sought to be executed against the Firm, answer can be found in Rule 50 of Order XXI of C.P.C. Said provision reads:
"50. Execution of decree against firm.-
(1) Where a decree has been passed against a firm, execution may be granted -
(a) against any property of the partnership;
(b) against any person who has appeared in his own name under rule 6 or rule 7 of Order XXX or who has admitted on the pleadings that he is, or who has been adjudged to be, a partner;
(c) against any person who has been individually served as a partner with a summons and has failed to appear:
Provided that nothing in this sub- rule shall be deemed to limit or otherwise affect the provisions of [section 30 of the Indian Partnership Act, 1932 (9 of 1932)].
(2) Where the decree-holder claims to be entitled to cause the decree to be executed against any person other than such a person as is referred to in sub-rule(1), clauses (b) and (c), as being a partner in the firm, he may apply to the Court which passed the decree for leave, and where 12 the liability is not disputed, such Court may grant such leave, or, where such liability is disputed, may order that the liability of such person be tried and determined in any manner in which any issue in a suit may be tried and determined.
(3) Where the liability of any person has been tried and determined under sub-rule (2) the order made thereon shall have the same force and be subject to the same conditions as to appeal or otherwise as if it were a decree.
(4) Save as against any property of the partnership, a decree against a firm shall not release, render liable or otherwise affect any partner therein unless he has been served with a summons to appear and answer.
(5) Nothing in this rule shall apply to a decree passed against a Hindu Undivided Family by virtue of the provisions of rule 10 of Order XXX.
12. A plain reading of Rule 50 of Order 21 CPC would indicate that where a decree has been passed against a firm execution may be granted against any property of the partnership; against, any person who has appeared in his own name on being sued as partner of the firm, or who has admitted in the pleadings that he 13 is or who has been adjudged to be, a partner, against such person who has been individually served 'with summons' as a partner but has failed to appear. In other words, a decree against a firm can be executed - (i) against the property of the Partnership Firm, and (ii) against any person who has appeared in the suit individually in his own name and has been served with a notice under Rule 6 or 7 of Order 30 of CPC. However, sub-rule (1) of Rule 50 of Order 21 would not limit or otherwise affect the provisions of Section 30 of the Indian Partnership Act, 1932. A decree can be executed against a person other than referred to in sub-rule (1) clauses (b) and (c) as being partner in the firm and decree holder can apply to the executing court to grant leave to implead such person and if such liability is disputed, the executing court may order that liability of such person be tried and determined in the manner in which any issue in a suit would be tried and determined. The plaintiff-decree holder in such an eventuality must prove the liability of such person/s in the enquiry so conducted under Order 21 Rule 50(2) of C.P.C. In such 14 circumstances, the course that would be open to such person against whom decree is sought to be executed has to prove that he is not a partner of the firm and decree sought to be executed against the firm is not binding on him.
13. The leave is sought by the decree-holder for executing the decree against such person and the leave granted or refused, affects only such property or which is not the property of the Firm. What is intended by sub-rule (2) of Rule 50 is that liability of a person as partner should be adjudicated as an issue and once the liability is decided or where liability of such person has been determined under sub-rule (2) it enables the decree holder to execute the decree against such partner of the firm.
14. The expression "such liability" found in sub-rule (2) of Rule 50 of Order 21 in the context means, the liability as a partner and as soon as it is found that such person was a partner of the Firm, the decree can be executed against such partner and he would be a 15 judgment debtor and it would not be open to him to raise any further contention against the validity or executability of such decree.
15. A person who has admitted that he is a partner, cannot dispute the decree. In other words, unless a contention is raised that he is not a partner or liability of such person is determined under Order 21 Rule 50(2), such person cannot be made liable to indemnify the decree passed against the firm on the ground of such person being a partner of the firm.
16. In fact, the expression "at any stage of the proceedings", had come up for consideration before the learned Single Judge of this Court in the matter of SMT. ASWATHAMMA v. H.M.VIJAYARAGHAVA reported in AIR 1999 KAR 29 whereunder it came to be held that said expression would mean till proceedings in the suit and the suit has not come to closure by passing of the final decree. It was further held that:
"17. The expression "at any stage of the proceedings" means the stage till the proceedings in the suit are going 16 on and suit has not come to a closure by passing of the final decree. In the suit for partition, no doubt, some times one decree is passed and generally for determining share, a preliminary decree is passed and then final decree proceedings takes place. Merely because preliminary decree has been passed, it cannot be said that the proceedings in the suit have come to an end. The proceedings in the suit continue when the application for final decree is made and when subsequent and new developments takes place, then keeping in view the subsequent developments or subsequent events, it is also open to the Court to modify that decree under law, taking into consideration subsequent developments. That in order to finally adjudicate the matter, final decree is to be passed, taking note of subsequent events. So it cannot be said that stage in proceedings in the suit has come to an end, with the passing of preliminary decree. The final decree proceeding are the continuation of proceedings of the suit, the proceeding in the suit are yet going on and have not come to a closure and if necessary as such, Court has got inherent powers to modify final decree proceedings, the proceedings in the suit had been going on and therefore stage of final decree proceedings being the continuation of proceedings in suit, the Court's jurisdiction did continue to consider the application for impeladment of necessary party who had not been impleaded for reasons best known by the plaintiff, in spite of defendant No.2 raising such a plea and so the order impugned cannot be held to be without jurisdiction."
17
17. Keeping the above principle in mind which we are in agreement, when facts on hand at the cost of repetition is examined, we find that State Commission has not adjudicated the claim of the petitioner as to whether he admits to be a partner of the first judgment debtor-firm as on the date of complaint, if not, whether he would dispute his liability as partner of the Firm or whether the purported retirement from the firm, which he has claimed to be on 31.03.2012, would absolve him of his liability to indemnify the claim against the partnership firm. Only upon such adjudication as contemplated under sub-rule (2) of Rule 50 of C.P.C., State Commission could have proceeded to pass an order holding petitioner would be liable to answer the claim against firm and not before such adjudication. As such, impugned order dated 10.07.2018 (Annexure-A) cannot be sustained.
For the reasons aforestated, we proceed to pass the following:
18
ORDER
(i) Writ Petition is allowed and order dated 10.07.2018 (Annexure-A) passed in Execution Petition No.10/2016 by State Commission is set aside.
(ii) Application filed under Order 1 Rule 10 CPC r/w Order 21 Rule 50 and Section 151 of CPC is restored to the file of State Commission for being adjudicated afresh, keeping in mind the observations made hereinabove and sub-rule (2) of Rule 50 of Order 21 CPC.
(iii) It is open to both parties to urge their respective grounds before the State Commission and State Commission shall consider the application afresh without being influenced by its order dated 10.07.2018.
19Both parties agree that they would address their arguments before the State Commission positively and without fail on the next date of hearing which is said to be fixed on 22.10.2020. Their submission and undertaking is placed on record.
SD/-
JUDGE SD/-
JUDGE DR/VGR