Madras High Court
A.K.Hidayathulla vs Mohammed Ziaudeen on 17 September, 2012
Author: C.S.Karnan
Bench: C.S.Karnan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 17/09/2012 CORAM THE HONOURABLE MR.JUSTICE C.S.KARNAN C.M.A.(MD).No.1058 of 2012 and C.M.A.(MD).No.1059 of 2012 & M.P.Nos.2 and 2 of 2012 C.M.A.(MD)No.1058 of 2012 A.K.Hidayathulla ... Appellant Vs.
1.Mohammed Ziaudeen
2. Shahul Hameed ... Respondents and C.M.A.(MD)No.1059 of 2012 Shahul Hameed ... Appellant Vs.
1.Mohammed Ziaudeen
2.A.K.Hidayathulla ... Respondents PRAYER in both appeals Civil Miscellaneous Appeals are filed under Order XVIII, Rule I of C.P.C. and Section 104 CPC, to call for the records relating to the order dated 24.08.2012 in I.A.No.18 of 2012 in O.S.No.42 of 2012 on the file of Additional District Judge, Ramanathapuram and set-aside the same.
!For appellant in C.M.A.(MD)No.1058 of 2012... Mr.M.Vallinayagam , Senior Counsel for Mr.J.Anand Kumar ^For first respondent in C.M.A.(MD)No.1058 of 2012... Mr.R.Vijayakumar for Mr.K.Rajasekar and For appellant in C.M.A.(MD)No.1059 of 2012... Mr.ARL.Sundaresan, Senior Counsel & Mr.Anand Chandrasekar for Mrs.A.L.Gandhimathi For first respondent in C.M.A.(MD)No.1059 of 2012... Mr.G.R.Swaminathan ******* :COMMON JUDGEMENT The short facts of the case are as follows:-
The ranks of the parties in the trial Court, for sake of convenience, has also been followed before this Court. The plaintiff / petitioner viz., Mohammed Ziaudeen has filed a suit in O.S.No.42 of 2012, along with an interlocutory application in I.A.No.18 of 2012, against the defendants 1 and 2 / respondents praying for (a) declaration of the sale deed bearing No.6219 of 2011 registered on the file of the Sub Registrar, Manamadurai, dated 29.12.2011 as null and void and (b) to direct the defendants and their men, agents not to interfere with the operation of the petrol bunk, stated in the scheduled mentioned property and other reliefs.
2. The plaintiff stated that the suit scheduled mentioned property bearing survey No.250/2C, 250/4A, an extent of 1 acre 20 cents originally belonged to one Pitchai Vellar. After his demise, his legal-heirs had alienated the property to the plaintiff, first defendant and one Mohammed Rafi on 18.10.1995, through a registered sale deed. Out of the said land, an extent of 69 cents were divided equally amongst the three of them. Thereafter, the rest of the schedule mentioned property i.e., an extent of 51 cents had been given to Bharat Petroleum Corporation Limited for lease for a period of 30 years under a registered lease deed dated 26.08.1999. The said sale deed has been registered on the file of Sub Registrar Office, Manamadurai. Before registering the lease deed, the Bharat Petroleum Corporation had been assigned the suit property on 01.04.1998. They had also started their business. The second defendant viz., Shakul Hameed and his brother Mohammed Yusuf are partners and running a petrol bunk at Parthibanoor, after getting a dealership from the Bharat Petroleum Corporation Limited, Pathibanoor. The said petrol bunk business has been transferred to the suit property on the basis of lease agreement. At that point of time, the co-partner, Mohammed Yusuf had been discharged from the partnership. Therefore, the plaintiff had joined as a partner in the said firm and made a joint business agreement with the second defendant viz., Shahul Hameed and started the business in the said suit property. Thereafter, on 11.06.2002, the plaintiff and the second defendant as one part and the Bharat Petroleum Corporation as another part have made a memorandum of agreement. As per memorandum of agreement, the Bharat Petroleum Corporation had granted licence to both of them to sell the petroleum products for a period of 15 years.
Thereafter, the co-partner viz., the second defendant, Shahul Hameed had discharged himself from the partnership firm in the year 2006, but the plaintiff has been continuously running the said business. The Bharat Petroleum had not given its consent to discharge the said Shahul Hameed from the said partnership firm. Therefore, the plaintiff and the second defendant viz., Shahul Hameed had made a written agreement in order to discharge the said Shahul Hameed / second defendant. The second defendant had given a letter to the State Bank of India, Parthibanoor Branch stating that he had been discharged from the partnership firm. As such, he has no rights or connection with the partnership firm viz., M/s.N.S.Mohammed Sultan Automobiles Firm. As such, the second defendant has no rights over the said petrol bunk business.
3. The plaintiff further stated that an account has been opened in the name of the petrol bunk, which is being run in the suit property, with State Bank of India and that the account number is CC11545956384. The Bharat Petroleum Corporation has been receiving the payments for the supply of petroleum products in this account. The Bharat Petroleum Corporation had nominated the plaintiff as the key person through their letter dated 30.10.2011. As such, the plaintiff is operating the bank account, as key person, in the name of N.S.Mohammed Sultan Automobiles. Under the circumstances, on 29.12.2011, the first defendant viz., A.K.Hidayathullah had abducted him to the Sub-Registrar Office, Manamadurai and obtained his signature in the sale deed which was already prepared, and the same was registered on the file of Sub Registrar, Manamadurai. Even though the said sale deed had been executed under threat, the plaintiff has been continuously running the petrol bunk business in the said suit property. The plaintiff disclosed the so-called sale deed to his relatives, on 30.12.2011. Immediately, his relatives had conducted arbitration on 30.12.2011. As per arbitration decision, it was agreed that the first defendant, viz., A.K.Hidayatullah had to convey the said property in favour of the plaintiff. Without complying with this arbitration decision, the first defendant left for Singapore and came back on 10.06.2012. On that day, the plaintiff had demanded the first defendant to convey the said property but the first defendant had refused to do so.
4. The plaintiff further stated that as per contentions of the sale deed, 1/3rd of the suit property had been transferred in the name of the first defendant and the plaintiff had received a sum of Rs.5,00,000/- for the total sale consideration of Rs.5,15,514/- through cheque bearing No.114289 drawn on Indian Overseas Bank, Spenzer Plaza Branch. Actually, there was no sale consideration received by the plaintiff. Hence, the plaintiff has prayed to set- aside the sale deed as null and void.
5. The plaintiff further stated that on the strength of the sale deed, the first defendant and his brother, A.K.Abdul Nazeer and his men had forcibly attempted to occupy the said petrol bunk. Immediately, the plaintiff had lodged a complaint before the Parthibanoor Police Station. The Parthibanoor Police authorities had received the said complaint and issued a receipt but subsequently no enquiry was made on the said complaint. Subsequent to this, the Parthibanoor Police Station Officers had received a complaint from the brother of the first defendant on 09.06.2012. Again on 13.06.2012, the same police officers had received one more complaint from the son-in-law of the first defendant and had registered a false criminal case against the plaintiff and his family members. Besides this, the police officials had threatened the plaintiff not to enter into the suit property. Therefore, the plaintiff had made an appeal to the Revenue Divisional Officer, Paramakudi and sought for protection. The said appeal dated 15.06.2012 had been referred to the Deputy Superintendent of Police and in the same representation, the Revenue Divisional Officer made an endorsement to give adequate protection to the plaintiff, as he was a key person of the petrol bunk. In spite of this, the police officials had not complied with the said endorsement. Thereafter, the plaintiff had sent a legal notice on 12.06.2012, stating that the suit property has been let out to Bharat Petroleum Corporation for lease for a period of 30 years under a lease deed dated 03.09.1999. The plaintiff's counsel further informed the defendant that the original partner Shahul Hameed, who is the second defendant herein, had been discharged from the partnership and the plaintiff alone is running the petrol bunk as a key person. As such, the first defendant and Mohammed Rafi have no rights over the said property. Further, the sale deed dated 29.12.2011 had been obtained forcibly under threat. As such, the said sale deed is invalid and the learned counsel for the plaintiff asked the first defendant not to disturb the plaintiff's business administration of the petrol bunk. After receipt of the said legal notice, the first defendant had sent a reply notice through his counsel on 15.06.2012 stating that the original partner, viz., Yusuf had been paid the share amount by the first defendant and that the plaintiff, first defendant and Mohammed Rafi are the partners and each of them have 16.33% as their individual shares and that Shakul Hameed, the second defendant herein has 53% shares. But the plaintiff has however denied these contentions. The plaintiff further stated that the second defendant Shakul Hameed had been discharged from the partnership firm. Thereafter, the plaintiff is running the petrol bunk with his own funds. The plaintiff further denied the entire contentions made in the sale deed. The plaintiff further denied that the first defendant's brother A.K.Nazeer has been administering the business with the second defendant Shahul Hameed and that the first defendant is supervising the said business. The plaintiff further stated that the contentions in the reply notice sent by the first defendant's counsel are inconsistent. The plaintiff further stated that he had filed Crl.O.P.No.8152 of 2002 before the Madurai Bench of Madras High Court, to register a criminal case against the first defendant and his men, on his complaint dated 04.06.2012. This Court had dismissed the said petition and given liberty to the plaintiff to approach a proper forum for his remedy. Hence, the above case has been filed along with an interim injunction application.
6. The first defendant viz., A.K.Hidayatullah had filed a counter statement in the Interlocutory Application in I.A.No.18 of 2012 in O.S.No.42 of 2012, stating that the plaintiff is not a key person for running the said petrol bunk. As per letter dated 03.10.2011, the Bharat Petroleum Corporation has mentioned in the column of name of key person and their designation as Mohammed Ziaudeen, partner. As such, the plaintiff is not the absolute Proprietor of the M/s.N.S.Mohammed Sultan Automobile Firm. The plaintiff had not disclosed the general clauses of the partnership firm. As per partnership deed, the plaintiff has been named as first partner and as such he cannot be treated as a key person. The defendant further stated that the plaintiff, Mohammed Rafi and he had registered a joint partnership deed in the name of M/s.AL Ammen and Co. The same was registered on the file of Registrar of Firms, Chennai Central dated 01.04.1999. Under the circumstances, the said Shahul Hameed and M/s.A.L.Ameen & Co., represented themselves as joint partners to sell the petroleum products along with M/s.N.S.Mohammed Sultan Automobiles for which a joint business agreement has been registered. On behalf of M/s.A.L.Ameen & Co., the plaintiff signed as partner. As such, the plaintiff cannot be treated as a sole proprietor to run the business. The first defendant further denied the allegation regarding the discharge of the second defendant from the partnership firm in the year 2006. The income-tax remittance has been submitted by the auditor for the M/s.N.S.Mohammed Sultan Automobile Firm upto the assessment year 2009-2010, which shows clearly that the plaintiff is not the sole proprietor of the partnership firm. The first defendant specifically stated that a tanker lorry has been purchased in the name of Mohammed Rafi for the business operations of the partnership firm viz., M/s.N.S.Mohammed Sultan Automobiles. The second defendant is a partner and so far he has not been discharged legally. The first defendant further states that he has paid the entire sale consideration to the plaintiff for his share of property. Hence, he had duly executed the sale deed before the Sub Registrar Office, Parthibanoor. The first defendant further denied the other allegations regarding forcible abduction of plaintiff. Actually, the plaintiff had received a cheque for a sum of Rs.5,00,000/-. The same was returned to the first defendant against payment of cash. In order to prove the same, the plaintiff had executed a receipt. Besides this, the plaintiff had received a sum of Rs.20,00,000/- in the presence of witnesses for the petrol bunk balance amount. After executing the sale deed, the plaintiff and first defendant met each other on several occasions. During these occasions, the plaintiff had never raised any dispute regarding the sale deed. The plaintiff's complaint had been duly looked into by the Police Officers and the complaint was closed as mistake of facts. Subsequently, the plaintiff had approached the High Court for registering a criminal case against the first defendant and his men. The same was dismissed. The plaintiff's complaint lodged before the Revenue Divisional Officer was also not proved, after enquiry. The first defendant had specifically stated that the plaintiff had executed a sale deed on 29.12.2011, wherein, it has been mentioned that the plaintiff is not interested to run the petrol bunk business jointly. As such, he had received the amount and had issued a receipt. Therefore, he has no locus standi to seek any relief against the defendant before the trial Court. The first defendant further stated that as per the plaintiff's complaint, he is not running the same business in the relevant period. The first defendant further stated that the second defendant, Shahul Hameed and the plaintiff had jointly run the petrol bunk in the name of M/s.N.S.Mohamed Sultan Automobiles. The bank account is being operated in the name of Shahul Hameed with the Indian Overseas Bank. Therefore, the plaintiff had not approached this Court with clean hands and it was prayed to dismiss the said interlocutory application.
7. The second defendant had filed a counter statement and resisted the interim application stating that the plaintiff is not a partner of M/s.Mohammed Sultan Automobiles petrol bunk. Actually, the plaintiff is a partner in M/s.Ameen and Company and as such he was running the petrol bunk with the second defendant. He also denied that the plaintiff is the key person for the said M/s.N.S.Mohammed Sultan Automobiles Petrol Bunk. The defendant further stated that his brother, Mohammed Yusuf and he are partners in M/s.N.S.Mohammed Sultan Automobiles and running the business at Parthibanoor, after getting a dealership from the Bharat Petroleum Corporation. Under the circumstances, the plaintiff, the first defendant and one Mohammed Rafi had approached the second defendant stating that they are the partners of M/s.A.L.Ameen and Company and they are willing to join with the second defendant to run the petrol bunk business. The same was accepted by him, and as such the petrol bunk business has been started in the name of "M/s.N.S.Mohammed Sultan Automobiles", as N.S.Mohammed Sultan is the grandfather of the second defendant. Regarding selling of the petroleum products, the plaintiff and his brother Mohammed Yusuf had written a partnership deed and submitted it to the Bharat Petroleum Corporation. Subsequently, the said partner Mohammed Yusuf had decided to discharge himself from the partnership firm. Thereafter, the plaintiff, first defendant and Mohammed Rafi who are partners of M/s.A.L. Ameen and Company had joined with the second defendant to start a new joint business for which an agreement was made. Under the circumstances, in order to avoid legal infirmity, a joint business agreement deed was made on 22.10.1999 and a memorandum of agreement was also executed, to administer the affairs of M/s.A.L.Ameen and Company.
8. The second defendant further stated that he and the plaintiff, first defendant and Mohammed Rafi had made an agreement on 01.04.2000 to run the joint business in the name of M/s.Mohammed Sultan Automobiles. The said partnership has been registered on the file of Chennai Registrar of Firms bearing No.20010236/2001. This fact was not disclosed by the plaintiff in his case. The second defendant had denied that he had discharged himself from the partnership firm since 2006 and that he had sent a letter to the State Bank of India, Parthibanoor, to this effect. Till today, the second defendant is a partner of M/s.N.S.Mohammed Sultan Automobiles Firm. Income-tax returns are also in the name of the second defendant. The plaintiff himself had signed and submitted the income-tax returns in which he had disclosed that the plaintiff, the second defendant and A.L.Ameen & Company are partners. The second defendant further stated that the contentions raised by the plaintiff that Bharat Petroleum Corporation and State Bank of India had recognized that the plaintiff is a key person to run the petroleum products business in the name of M/s.N.S.Mohammed Sultan Automobiles is not sustainable. Further, the plaintiff had approached the first defendant in the month of December 2011 and executed a sale deed in favour of the first defendant after receiving the sale consideration. The other partner Mohammed Rafi had also transferred his share to the first defendant. As such, the first and second defendants are together running the petroleum products business in the name of "M/s.N.S.Moahmmed Sultan Automobiles firm. The second defendant further stated that the plaintiff had filed a case before the High Court and also sent an advocate notice in which the second defendant had not been included as party. The plaintiff, with mala fide intentions, had created a complication, after executing a sale deed in favour of the first defendant for wrongful gain. The plaintiff had not included the Indian Overseas Bank and Registrar of Commercial Department as necessary parties in the above suit. Hence, it was prayed to dismiss the said interim injunction.
9. On verifying the averments of all the parties and on documents submitted by the plaintiff, i.e., Exs.P1 to P6 and the documents produced by the first defendant, i.e., Exs.R1 to R32 and on hearing the averments of learned counsels of all parties, the learned judge allowed the interlocutory application in I.ANo.18 of 2012 in O.S.No.42 of 2012 on 24.08.2012.
10. Aggrieved by the said order, the first defendant has filed C.M.A.No.1058 of 2012 and the second defendant has filed C.M.A.No.1059 of 2012.
11. The learned counsel for the appellant / first defendant has argued that the Courts below, after having found that the validity of the sale deed dated 29.12.2011 can be gone into only at the time of trial ought to have seen that the first respondent was not entitled for injunction. It was contended that the Court below ought to have seen that the first respondent herein had not entered into partnership with the second respondent herein in his individual capacity. But he had entered into the partnership with the second respondent only in his capacity as a partner of M/s.AI Ameen & Company, which was by itself a registered partnership firm and hence, the appellant herein was also a person fully interested in the partnership business of M/s.N.S.Mohammed Sultan Automobiles. It was pointed out that in this regard, as against Ex.P3 viz., partnership deed dated 22.10.1999 produced by the first respondent herein, the Court below ought to have accepted the partnership deed in Exs.R16 and R17 and the extracts from the Registrar of Firms in Exs.R2 and R25. It was pointed that the aforesaid documents would show that M/s.AL Ameen & Company was a partnership firm comprising of three partners, viz., (i) A.K.Hidayathulla, the appellant herein, (ii) Mohammed Ziaudeen, the first respondent herein and (iii) M.Mohammed Rafi and it is the said AL Ameen & Company which has entered into a partnership with the second respondent herein. It was contended that the Court below ought to have seen that the aforesaid registered documents were proof of their contents as per Section 68 of Partnership Act. It was contended that the Court below ought to have seen that there is absolutely no material placed before the Court as if the appellant herein was not having any interest in the partnership firm. It was argued that the Court below ought to have seen that it is the first respondent, who had, in and by his rejected sale deed dated 29.12.2011, conveyed his 1/3rd share in the land in favour of the appellant herein wherein the petrol bunk was being run and as such, he had dissociated himself and resigned from the partnership firm. It was contended that the Court below ought to have seen that the mere description of the first respondent herein as a key person would not clothe him with any right to run the petrol bunk unilaterally, to the exclusion of the appellant and the second respondent herein. The learned counsel pointed out that the Court below ought to have seen that no order of injunction could be granted against a co-partner. The learned counsel further argued that the Court below ought to have seen that there is no evidence to show that prior to the filing of the suit, it was the first respondent alone who was carrying on the business to the exclusion of the appellant and the second respondent herein. It was further pointed out that the Court below ought to have seen that substantial evidence was filed by the appellant and the second respondent herein, in the form of respondent exhibits to show that it was they, who carried on the business of the partnership firm. The learned counsel further argued that the Court below ought to have seen that the first respondent herein had not proved prima facie case and that the balance of convenience was in his favour and that he was not entitled to an order of injunction. The learned counsel further argued that the necessary parties i.e., Bharat Petroleum Corporation and State Bank of India have not been impleaded and as such the relief sought for by the first respondent should not have been granted.
12. The learned counsel pointed out that as per Section 12, Sub clause (a) of Indian Partnership Act, it is evident that every partner has a right to take part in the conduct of the business. As such, the learned counsel pointed out that the impugned order goes against the rights of the co-partner, i.e., the appellant herein.
13. The learned counsel, in order to prove the existence of the partnership, had submitted 32 relevant documents. It was further submitted that the plaintiff himself had lodged a complaint to the Revenue Divisional Officer, Paramakudi on 14.06.2012 stating that the appellant herein / first defendant had forcibly occupied the petrol bunk from 10.06.2012 onwards. As such, the second prayer i.e., interim injunction restraining the appellant and his men / agents sought for is not maintainable since the plaintiff himself, in his complaint had admitted that the first defendant is in possession. In order to prove the existence of the partnership firm, the first defendant / appellant herein had filed several documents.
14. The learned counsel further submitted that a serious allegation had been raised by the plaintiff that the appellant herein had forcibly taken the plaintiff to the Registrar Office and obtained his signature in the sale deed which had been prepared already. For the mode of execution of the sale deed, it is necessary for both the parties to be present with two witnesses and that the photographs of both parties have to be affixed in the presence of the Registrar and his subordinates. As such, the learned counsel pointed out that the contention of abduction raised by the first respondent is highly imaginary and made without any basis. From the date of sale deed i.e, 29.12.2011, the plaintiff has no locus standi to continue in the suit premises and run the petrol bunk, since the appellant herein has become the absolute owner of the property and as such if the first respondent herein continues to occupy the suit property, on the strength of the interim injunction granted by the trial Court, it would amount to unlawful occupation and it would be prejudicial to the interests of the appellant herein.
15. The learned counsel, in support of his arguments has listed the following judgments:-
(i) Sivapalani v. Muruvappan reported in (2002)2 MLJ 239
12. The defendants filed a counter denying the averments made by the plaintiff. However, the court below based upon the documents and after hearing the parties, allowed the application filed by the plaintiff and granted an order of injunction. Aggrieved against this, the 1st defendant has come forward with the present appeal. Learned counsel for the appellant / 1st defendant mainly contended that the issue before the court below is when the dissolution of the partnership firm is sought for, whether it would be open for one partner to carry on business in exclusion of the other partners. There is also provision for arbitration under the partnership agreement. Moreover, there had been a settlement of dispute between the parties, in which the plaintiff agreed to pay a sum of Rs.2 crores to the 1st defendant. As a matter of fact, a sum of Rs.95 lakhs has been paid and what remains to be paid is only Rs.1,05,00,000/=.
Ignoring the said fact and compromise reached between the parties, the present suit has been filed for dissolution of the partnership firm as well as injunction. The plaintiff is disentitled to claim the relief in equity as the plaintiff had not come to court with clean hands. There cannot be an order of injunction as against the other partners in view of the fact that one is the agent of others and, as such, there cannot be any injunction as against the other partners from participating in running of the business. The plaintiff having opted for dissolution of partnership firm and sought for rendition of profit and loss account of the business of the firm shall not be entitled to run the business since the affairs of partnership will come to an end the moment one partner desires to disassociate himself from the business of the partnership firm and the running of the business is outside the purview. Section 41 of the Specific Relief Act has not been considered. When an alternative, effective and efficacious relief is available, the litigant can only seek for that relief in law and cannot seek for mandatory injunction directing the appellant to return of cheques which have been issued by the 1st respondent for legally enforceable debt. The plaintiff has no prima facie case and the balance of convenience is not in his favour. When the partnership is at will, the moment the suit for dissolution and rendition of accounts has been filed it may not be proper to allow the parties to do business. Now, the plaintiff is trying to wriggle out of contract and avoid the payment of money to the appellant."
(ii) M/s.Seemax Construction (P) Ltd., vs. State Bank of India and another reported in AIR 1992 DELHI 197 "Civil P.C.(5 of 1908), O.39, R.1, R.2, S.151 - Relief of injunction - Suppression of mate-rial facts - Effect - Suit for interim and permanent injunction restraining defendants from invoking bank guarantees - Suits on same facts, plea and relief claimed, filed earlier in other Courts, withdrawn after filing of present suit - Fact not disclosed - Amounts to suppression of material fact - Suit to be dismissed without going into merits."
(iii) Bishambhar Dayal v. Moolchand and others reported in AIR 1964 RAJASTHAN 179 (Vol.51, C46) "Specific Relief Act (1 of 1877) S.54 - Suit by partners for injunction restraining other partners from interfering with conduct of business - Facts proved merely showing that relations between partners had became strained - Allegation of misconduct or illegal interference with the management of Business by defendant not established - Court will not grant injunction as proper remedy in the case is to sue for dissolution of partnership."
(iv) Commissioner of Income-Tax vs. Nalli Venkataramana and Ors. reported in 1984 145 ITR 759 AP " 55. Similarly, Dungate v. Lee [1967] 1 All ER 241 (Ch D), provides a close analogy to s. 15 of the Andhra Pradesh Excise Act. In the said case the provisions of the Betting and Gaming Acts, 1960 and 1963, were considered. Section 2 provided that no person shall act as a bookmaker on his own account unless he is a holder of a permit authorising him to act. Otherwise he was liable to be punished. Section 28(1) defined "book maker" as any person other than the Board, who, whether on his own account or as servant or agent to any other person, carries on the business, etc. Para. 17 of Sch. I provided that the licence may be refused by the authority if it is satisfied that the business will be managed or carried on for the benefit of a third party. In spite of the above provisions a partnership was formed by the licensee partner who was the defendant in the case. The plaintiff was the partner who had no bookmaker's permit. The plaintiff did not take bets over the counter of the office but took bets sometimes on telephone. The plaintiff sued for dissolution. The defendant pleaded that the partnership was void under the Act. Buckley J. held that although the Act required every partner who "acted as a book-maker" to have a bookmaker's permit, it did not require that every partner should have a bookmaker's permit and accordingly the partnership was held valid. It was observed by Buckley J. as follows (p. 248)
87. Further, when a partnership-firm is formed with an intention that the non-licensee partner would not act in violation of the Act or the Rules (i.e., by themselves conducting the prohibited transactions), a question might arise as to what would happen to the validity of the partnership if, at times, the non- licensee partners "acted" contrary to the Act or Rules.
88. We have already referred to the judgments of the Supreme Court which stated that it is for the authorities to take either penal action or exercise discretion to suspend or cancel the licence. But that does not make a partnership - which was legal, to start with, - illegal on account of the subsequent wrongful action of one of the partners. In fact in Dungate v. Lee [1967] 1 All ER 241 (Ch D), Buckley J., also dealt with this aspect and held (p.
250) :
"any infringement of the Act of 1960 that may be have occurred in the conduct of the business after the establishment of partnership cannot, in these circumstances have any bearing on the validity of the partnership agreement."
89. To a like effect are the observations of the Mysore High Court in Sree Ramakrishna Mining Co.'s case [1967] 64 ITR 197, where the said High Court followed Marles v. Philip Trant and Sons Ltd. [1954] 1 QB 29 (CA). In that decision singleton and Denning L. J. (Hodson L. J., dissenting) pointed out the distinction between illegality of a contract and illegality in its performance. We respectfully agree with the above rulings, and hold that the subsequent acts of the partners cannot make the partnership illegal.
16. The learned counsel for the second defendant / appellant in C.M.A.No.1059 of 2012 submitted that the Court below ought to have seen that even going by the case of the first respondent herein at its face value, it is admitted by him that the land comprised in survey No.250/2C and 250/4A over which, the suit petrol bunk was being operated belonged jointly to him (Mohammed Ziaudeen), A.K.Hidayathulla, the second respondent herein and the first defendant in the suit and one Mohammed Rafi and it is all the three of them, who had executed a registered lease deed in favour of Bharat Petroleum Corporation Limited on 26.08.1999 under document No.1438 of 1999 in the office of the Sub Registrar, Manamadurai. Thereafter, the appellant herein, who was carrying on petroleum dealership in a different location in Parthibanoor along with appellant's brother, Mohammed Yusuf had decided to shift his business to the site in question and with Mohammed Yusuf resigning from the partnership, the first respondent herein joined the appellant herein as partner on 22.10.1999 and thereafter on 11.06.2002, a memorandum of agreement was entered into by the first respondent and the appellant herein on one side and M/s.Bharat Petroleum Corporation Limited on the other side. As such, even according to the case of the first respondent herein, the partnership was between him and this appellant. The learned counsel further pointed out that the Court below ought to have seen that it was a case of a partnership in writing and hence, retirement or dissolution, if any, would be in writing between the parties and the terms of such retirement or dissolution would be clear and categorical. In the instant case, there is absolutely no pleading as to the date on which the alleged retirement took place, the terms on which the alleged retirement took place and the manner in which the alleged retirement settlement was made. It was pointed out that the Court below ought to have seen that Ex.P16, the alleged letter, said to have been written by the appellant herein to the State Bank of India, Parthibanur Branch was stoutly disputed and denied by the appellant herein and as a matter of fact, the Court below has said that the correctness or otherwise of the said documents could be decided only at the time of trial. It was pointed out that the first respondent has alleged that the said document had been written on 13.12.2006 and that the retirement was with effect from 10.08.2001; the learned counsel however contended that the handwriting in the said alleged letter has not been proved and that a perusal of the contents of the letter would show that it is not a genuine letter. It was pointed out that the statements made in the said letter does not amount to a resignation from the partnership firm. It was also pointed out that if at all the resignation was with effect from 10.08.2001, then on 11.06.2002, a memorandum of agreement could not have been entered into by the first respondent herein and the appellant on one side representing M/s.N.S.Mohammed Sultan Automobiles and M/s.Bharat Petroleum Corporation Limited on the other side. It was pointed out that the Court below erred in not taking into consideration the registration of the partnership firm M/s.AL Ameen & Company with the Registrar of Firms, Chennai which would show that the said partnership firm comprised of three persons viz.,
(i) Mohammed Ziaudeen, the first respondent herein (ii) A.M.Hidayathulla, the second respondent herein and (iii) M.Mohammed Rafi. It was also pointed out that even in the opinion-cum -comfort letter dated 03.10.2011, issued by the Bharat Petroleum Corporation Limited, it showed Mohammed Ziaudeen as a partner and as such he was not the sole proprietor even on 03.10.2011. It was further pointed out that the extract of the Registrar of Firm marked as Ex.R4 and Ex.R25 would show that the first respondent herein was not the sole proprietor or the only person with interest either in M/s.N.S.Mohammed Sultan Automobiles or in M/s.AL Ameen & Company and hence his case deserves to be rejected. It was pointed out that the Court below ought to have seen that all the current bills were in the custody of the appellant and marked as respondent exhibits and as such, there is absolutely no evidence on the side of the first respondent to show that he was running the business as sole proprietor at the time of filing the suit. It was also contended that the reasoning of the lower Court that the letter Ex.P6 is not disputed as false or fabricated, is per se incorrect and vitiates the entire judgment. The learned counsel has argued that this contention has been stoutly denied in the counter. It was also pointed out that the necessary parties, viz., Bharat petroleum Corporation Limited and State Bank of India have not been impleaded and as such the suit has to be rejected along with the interlocutory application.
17. The learned counsel has filed a typed set of papers consisting of seven documents, supporting his contentions, including partnership deed and other connected records. The learned counsel had annexed a letter dated 03.10.2011 issued by the Bharat Petroleum Corporation Limited, wherein the plaintiff's designation has been mentioned as partner. Therefore, the learned counsel has prayed to set-aside the interim injunction granted in favour of the first respondent herein / plaintiff, as it is not sustainable under law.
18. The learned counsels for the first respondent / plaintiff in C.M.A.Nos.1058 of 2012 and in C.M.A.No.1059 of 2012 have jointly argued that an extent of 1.17 acres in S.No.250/4A and 3 cents in S.No.250/2C having a total extent of 1 acre 20 cents were purchased jointly under registered sale deed dated 18.10.1995 by the plaintiff, the first defendant and one M.Mohamed Rafi. On 16.03.1999 all the three owners have jointly executed a registered lease deed in favour of Bharat Petroleum Corporation Ltd., (BPCL), for the period of 30 years for the purpose of establishing a petrol bunk. The said lease regarding the land is still in-force. As per the said lease deed the BPCL shall be at liberty to put up superstructure for the purpose of establishment of petrol bunk. Hence, even as on today, the BPCL is in sole possession of the land and the superstructure therein.
19. It was contended that on 01.04.1999 a registered partnership was entered into between the plaintiff, first defendant and one Mohammed Rafi for carrying on general trade including business of petroleum products in the name and style of M/s.AL Ameen & Co. However, this is a general partnership deed without any reference to any petrol bunk, especially M/s.N.S.Mohammed Sulthan Automobiles. Hence, this deed of partnership has no connection whatsoever with the suit petrol bunk.
20. It was pointed out that on 22.10.1999 the plaintiff entered into the registered partnership with the second defendant for running a business of sale and purchase of petroleum products as a dealer of BPCL in thename of N.S.MOhammed Sultan Automobiles. As per the said partnership deed no new partner can be inducted or allowed to retire without the prior approval of BPCL. On 01.04.2000 another partnership deed was entered into between the second defendant and AL Ameen and Company, represented by the plaintiff. This partnership deed dated 01.04.2000 was not approved by BPCL and hence the partnership deed dated 01.04.2000 was not acted upon and it did not come into force. Hence, no right can be claimed by any party to the partnership deed dated 01.04.2000 to run the suit petrol bunk.
21. It was argued that based upon the partnership deed dated 22.10.1999, the BPCL granted license on 11.06.2002 in the name of the plaintiff and the second defendant for a period of 15 years. As per clause 4 of the said license, the premises will be in the sole possession of BPCL. As per clause 10(q), the premises shall not be sold or encumbered or sub-let to any other third party. As per clause 10 (s), the Constitution of the firm shall not be changed without obtaining the previous consent in writing of BPCL. Hence, it is evident that while the premises is in possession of BPCL, the business shall be run only by the licensees and not by any other person. The license granted by BPCL on 11.06.2002 is only in the individual names of the plaintiff and the second defendant and there is no reference whatsoever about AL Ameen & Co. Hence, any partner in AL Ameen & Co., has no right whatsoever to claim any right or interfere in the business of M/s.N.S.Mohammed Sultan Automobiles. The first defendant is neither a licensee of BPCL nor a partner in N.S.Mohammed Sultan Automobiles and hence has no right whatsoever to interfere in the petrol bunk business.
22. It was contended that on 02.09.2002 the BPCL approved the reconstitution proposal with effect from 11.06.2002 holding that the plaintiff and the second defendant alone are entitled to operate the dealership. On 13.12.2006, the second defendant had addressed letter to the State Bank of India, stating that he has retired from N.S.Mohammed Sultan Automobiles. Hence, the plaintiff continues to run the petroleum business exclusively from that date onwards.
23. It was argued that the BPCL has issued license to run the petrol bunk business only in the name of the plaintiff and the second defendant on 11.06.2002 for a period of 15 years. This was further confirmed on 02.09.2002 by BPCL. The said arrangement is continuing for more than 10 years. The opinion report cum confirmation letter dated 03.10.2001 (Ex.P6) issued by BPCL also indicates that the plaintiff is the key person running the petrol bunk. The account statement of State Bank of India dated 05.07.2012 (Ex.P7) and the certificate issued by the State Bank of India on 07.07.2012 (Ex.P8) would clearly indicate that the plaintiff alone is the key person authorized to run the petrol bunk.
24. It was pointed out that on 29.12.2011 the first defendant threatened the plaintiff and illegally obtained a sale deed of his 1/3rd share in the land. On 30.12.2011 a panchayat was held in which the first defendant agreed to convey the land to the plaintiff. However, the first defendant left for Singapore and returned only in the first week of June 2012. During the 6 months period between December 2011 and 1st week of June 2012 there was no disturbance for the plaintiff to run the petrol bunk business. Hence, the first respondent had not made any complaint to any authorities expecting the first defendant to convey the property after his return from Singapore.
25. It was contended that on 04.06.2012 the first defendant's brother attempted to interfere in the management of the petrol bunk and hence the first respondent lodged a police complaint. However, there was no action on the part of the police authorities. Hence, on 12.06.2012 the plaintiff issued a legal notice to the first defendant that the petrol bunk business exclusively belongs to him and the sale deed dated 29.12.2011 was obtained by coercion and fraud. On 15.06.2012 the first defendant issued a reply notice admitting that the plaintiff is a partner and so far he has not transferred his share in the petrol bunk and he is refusing to transfer the same in the name of the first defendant. Further, in the said reply notice it was admitted that the plaintiff is regularly coming to the petrol bunk and signing the records. The reply notice would clearly indicate that the plaintiff is continuously running the petrol bunk business in his name by regularly attending to the day-today business and so far he has not transferred the business to anyone. Hence, he had filed O.S.No.42 of 2012 for a declaration that the sale deed is null and void. The above said facts and the documents would clearly indicate that the plaintiff is the only person authorized by BPCL to run the business and neither the first defendant nor the second defendant had any role to play.
26. It was argued that the first respondent lodged a complaint before the RDO, Paramakudi on 14.06.2012 stating that he was threatened and physically removed from the bunk because he had not transferred the petrol bunk. The dispute is not with regard to the possession of any immovable property. The actual dispute is only with regard to the right to manage and administer the petrol bunk in dispute. For running a petrol bunk a license is required under law from a statutory corporation. In the present case BPCL, which is a statutory corporation has given license only in the name of the plaintiff and the second defendant and not in the name of any other person or firm. The licensee alone is responsible for the entire administration of the bunk. Any person other than a licensee cannot be put in administration of the bunk contrary to the license agreement of BPCL. Hence, the report of deputy Superintendent of Police, Paramakudi dated 11.07.2012 is contrary to the facts and statutory license conditions.
27. It was pointed out that even as on today, the first respondent is continuing the petrol bunk business as a licensee and carrying on bank transaction with BPCL through State Bank of India, Parthipanoor. Hence the allegation that he had sold his 1/3 share in the land and relinquished his share in the petrol bunk business is absolutely false. Exs.P4 to P8 and Exs.P12 to P16 would clearly indicate that he is running the business as on today and neither the first defendant nor the second defendant has any role in the management or administration of the bunk.
28. It was contended that the trial Court has considered all the documents and the submissions made on either side and arrived at a correct conclusion that the plaintiff alone is in administration of the bunk. The trial Court in para 32 of the order had pointed out that even at the time of arguments the defendants have admitted that the petroleum products are purchased only in the name of the plaintiff. Any defects or illegal activity pointed out by BPCL would only affect the plaintiff who is the licensee and not the defendants. The defendants have not established their legal right to administer the petrol bunk. On the other hand the plaintiff being a licensee and the key person authorized by BPCL is legally entitled to manage and administer the petrol bunk and answerable to the BPCL.
29. It was argued that the plaintiff established a prima facie case through Exs.P1, P3, P4 and P5 about his legal rights to run the business. The plaintiff has established the actual running of business through Exs.P6 to P8 and P12 as on the date of filing of the suit. The plaintiff is carrying on the business from 16.06.2002 as a licensee of BPCL for the past 10 years and hence the balance of convenience is also in favour of the plaintiff. The claim of the defendants that he had executed a sale deed on 29.12.2011 for the 1/3 share in the land and that he had relinquished his share in the business is in dispute and subject matter of trial. He continues to be the licensee of BPCL as on today, even as per the reply notice dated 15.06.2012 and the arguments submitted before the trial Court. If the interim injunction order already granted is vacated, for any mistake or mal practice committed by the defendants, he will be held responsible by BPCL, resulting in civil and penal consequences causing irreparable loss and hardship to the plaintiff. Hence, the interim order already granted by the trial Court may be confirmed.
30. From the foregoing discussions, this Court is of the considered view that the plaintiff is only a partner and not the sole proprietor of the partnership firm.
(i) Therefore, the interim injunction cannot be operated against the co-partners as per registered partnership deed dated 22.10.1999.
(ii) The plaintiff stated that the second defendant had been discharged from the partnership firm and an agreement was entered into between them to this effect. This agreement cannot be operated upon since the original agreement is still in force between the plaintiff and the second defendant as one part and the Bharat Petroleum Corporation Limited as the other part as per agreement dated 22.10.1999, which is valid for a period of 15 years.
(iii) The three principles viz., prima facie case, irreparable loss and balance of convenience have not been established in favour of the plaintiff. The interim order operates against the interests of the defendants, who are the partners of the firm. As such, the defendants 1 and 2 have been put to irreparable loss, due to the grant of the interim injunction.
(iv) The prejudice that the appellants would suffer by the grant of injunction in favour of the respondent would be much more than what the plaintiff / respondent would suffer by not granting the injunction in his favour. When there are serious disputes raised as to the genuineness of the deed of the sale and to the payment of consideration for rights to operate petrol bunk and the same has to be necessarily proved in the trial, I do not find that the balance of convenience is in favour of the respondent.
(v) Several issues have arisen in the said case. So, all these issues have to be framed and have to be decided on merits. Only then, the veracity of the facts can be determined. Therefore, this Court opines that a speedy trial is necessary to dispose the case on merits.
31. On considering the facts and circumstances of the case, arguments advanced by all the learned counsel for their respective parties and on perusing the impugned order of the learned judge passed in I.A.No.18 of 2012 in O.S.No.42 of 2012, on the file of the Additional District Judge, Ramanathapuram, dated 24.08.2012, and this Court's view listed as (i) to (v) and in order that equity should be maintained, I have no hesitation in allowing the appeals, thereby setting-aside the interim order of the Court below dated 24.08.2012 in I.A.No.18 of 2012 in O.S.No.42 of 2012. Accordingly, it is set- aside. This Court directs the Additional District Judge, Ramanathapuram to dispose the suit in O.S.No.42 of 2012, within a period of four months from the date of receipt of order after affording sufficient opportunities to the parties, without being influenced by this Court's discussion. The order passed by this Court, however, does not, in any way, affect any finding that the Court below may arrive at after hearing the parties and the materials and evidence placed in the course of hearing of the suit.
32. In the ultimate analysis, the above appeals in C.M.A.(MD).No.1058 of 2012 and C.M.A.(MD)No.1059 of 2012 are allowed. Consequently, the order passed in I.A.No.18 of 2012 in O.S.No.42 of 2012, on the file of Additional District Judge, Ramanathapuram, dated 24.08.2012 is set- aside. Consequently, connected miscellaneous petitions are closed. Accordingly ordered.
rns To The Additional District Judge, Ramanathapuram.