Full Text
HIGH COURT OF DELHI
Date of Decision: 16.12.2025
SH. SUBHASH CHANDER & ORS. .....Petitioner
Through: Mr. Rajiv Bahl, Mr. SP Srivastava,Ms. Sushmita Srivastava, Advocates
Through: Mrs. Kajal Chandra, Ms. Hatneimawi, Mr. Suyash Swarup, Mr. Ananyay Bhardwaj, Advs.
JUDGMENT
1. These are two appeals filed under Rule 5 of Chapter II (Exercise of Original Civil Jurisdiction) of the Delhi High Court (Original Side) Rules, 2018 read with Section 151 of CPC, 1908 challenging the Order dated 01.08.2025 (“impugned Order”) passed by the learned Joint Sh. Gautam Kalra and the O.A. 145/2025 has been filed by Sh. Suresh Chander Kalra.
2. The two appeals are predicated on the fact that vide impugned Order dated 01.08.2025 the learned Joint Registrar dismissed the application being I.A. 1495/2025 filed under Order I Rule10 of CPC, 1908 by the respondent No. 2 i.e., Sh. Suresh Chander Kalra and allowed the application being I.A. 6558/2025 filed under Order XXII Rule 4 read with Section 151 of CPC, 1908 by the petitioners.
3. The brief facts are that the petitioners filed the captioned petition under Section 34 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) seeking setting aside of Arbitral Award dated 01.09.2008. The respondents in the captioned petition i.e., Krishan Kumar Kalra HUF and Sh. Suresh Chander Kalra filed their reply to the captioned petition.
4. However, during the pendency of the captioned petition, Sh. Krishan Kumar Kalra, i.e., the Karta of Krishan Kumar Kalra HUF passed away on 19.10.2018. Accordingly, an application being I.A. No. 1495/2025 was filed by the respondent No.2 in the captioned petition i.e., Sh. Suresh Chander Kalra under Order I Rule 10 of CPC, 1908 for deletion of the name of respondent No. 1 i.e., Krishan Kumar Kalra HUF from the array of parties.
5. Subsequently, the petitioners also filed an application being I.A. 6558/2025 for impleading the surviving members/legal representatives of Krishan Kumar Kalra, HUF.
6. The learned Joint Registrar vide the impugned Order dismissed the application being I.A. 1495/2025 and allowed the application being I.A. 6558/2025. The operative portion of the impugned Order is extracted below:-
death of Respondent no. 1 for over the years and it was only in September 2024 that this fact has been disclosed to the Court. Soon thereafter application u/O XXII Rule 4 CPC has been filed on behalf of the petitioner for bringing the LRs of Respondent NO. 1 on record.
8. The judgment being relied upon by Ld. Counsel for LRs of Respondent no. 1 that HUF cannot itself be a partner in the firm, is rather of the favour of the petitioner. In this very judgment Rashikalal & Co. (supra), the Hon'ble Apex Court has categorically held that 'Even if a person nominated by the HUF joins a partnership, the partnership will be between the nominated person and the other partners of the firm.' 'If a Karta or any other member of the HUF joins a partnership, he can do so only as an individual. His rights and obligations vis-a-vis other partners are determined by the Partnership Act and not by Hindu law.
9. The Hon'ble Apex Court has further held in this very judgment that in law and HUF can never be a partner of partnership firm. Even if a person nominated by the HUF joins a partnership, the partnership will be between the nominated person and the other partners of the firm.
10. The other judgments relied upon by the LRs of Respondent NO. 1 is not applicable.
11. In view of above proposition of law and the fact that deceased Respondent no. 1 was one of the partner in his individual capacity, the application filed on behalf of Respondent no. 1 u/O I Rule 10 CPC stands dismissed and the application u/O XXII Rule 4CPC filed by the petitioner stands allowed. The LRs of Respondent no. 1 are allowed to be brought on record.”
7. Hence, the present appeals.
8. Mrs. Chandra, learned counsel for the appellants, states that the learned Joint Registrar failed to observe that the partnership deed dated 29.07.2001 affirms Krishan Kumar Kalra HUF as the partner and since, HUF can never be a partner in a partnership firm, no surviving member of Krishan Kumar Kalra HUF can be impleaded as a party to the proceedings. She relies on the judgment of Rashiklal & Co. v. CIT, (1998) 2 SCC 49 and more particularly a portion of paragraph No. 12, which reads as under:-
was the HUF. A Karta who enters into a contract of partnership with a stranger may be accountable to the other members of the HUF for the profits received from the partnership business. But that is something between the Karta and the HUF. But so far as the partnership firm is concerned, the Karta is a partner like any other partner. If a commission is paid to a partner who happens to be a nominee of an HUF, the commission is not paid to the HUF. It is paid by the firm to one of its individual partners. The partner may have to account for the monies received from the firm to another person or another firm or an association of persons or an HUF. But that will not alter the fact that commission was paid by the firm to one of its partners.”
9. She further states the learned Joint Registrar failed to appreciate that since the partnership firm i.e., M/s S.S. Traders already stood dissolved by virtue of the Award dated 01.09.2008, the surviving members of Krishan Kumar Kalra HUF cannot be impleaded as a party to the present proceedings which is a dispute between the erstwhile partners of a partnership firm. She states that in case the Court is not agreeable with her proposition, the partnership definitely stood dissolved on 19.10.2018 on the death of Sh. Krishan Kumar Kalra and as a result, his legal representatives cannot be impleaded in the proceedings. She places reliance upon the judgment of Annapurna B. Uppin v. Malsiddappa, (2024) 8 SCC 700 and more particularly paragraphs No. 14 to 16 which read as under:- “14. We need not go into other details of the arguments raised by the parties. In our considered opinion, once there was a registered partnership deed dated 27-5-1996, there is no further document placed on record by Respondent 1 complainant regarding dissolution of the said registered deed which continued till the time when the investment was made by Respondent 1 complainant on 21-5-2002 and hence Respondent 1 complainant would be deemed to be partner of the firm. It is only upon the death of the Managing Partner Basavaraj Uppin in March 2003, that the status of the firm would cease to exist or would stand dissolved.
15. Secondly, the investment made by Respondent 1 complainant was for deriving benefit by getting an interest on the same @ 18% p.a., therefore, it would be an investment for profit/gain. It was a commercial transaction and therefore also would be outside the purview of the 1986 Act. Commercial disputes cannot be decided in summary proceeding under the 1986 Act but the appropriate remedy for recovery of the said amount, if any, admissible to Respondent 1 complainant, would be before the civil court. The complaint was thus not maintainable.
16. Thirdly, there was no evidence on record to show that a fresh partnership deed was executed reconstituting the firm in which the present appellants had become partners so as to take upon themselves the assets and liabilities of the firm. The law is well settled that legal heirs of a deceased partner do not become liable for any liability of the firm upon the death of the partner.”
10. Today, this Court is only concerned with the impugned Order dated 01.08.2025 passed by the learned Joint Registrar, wherein the application being I.A. 1495/2025 under Order I Rule10 of CPC, 1908 was dismissed and the application being I.A. 6558/2025 under Order XXII Rule 4 read with Section 151 of CPC, 1908 filed by the petitioners were allowed.
11. In the present appeals, this Court is not dealing with the merits of the petition filed under Section 34 of the 1996 Act. The merits of the case shall be adjudicated only when the main petition is being heard. The issue whether Mr. Krishan Kumar Kalra was a partner in the partnership firm as the Karta of the HUF or not will only be adjudicated once the Section 34 petition is decided. This Court, while hearing arguments pertaining to application under Order I Rule 10 of CPC, 1908 and application under Order XXII Rule 4 read with Section 151 of CPC, 1908 need not and cannot delve into the said question.
12. Further, the fact is that the partnership deed was signed by Mr. Krishan Kumar Kalra and as per the judgment of Rashiklal& Co. (supra), the same would be in his independent capacity and not as Karta of the HUF. Assuming that Mr. Krishan Kumar Kalra had derived some or any benefits from the partnership firm, which is under challenge in the captioned petition under Section 34 of the 1996 Act and in case his Legal Representatives are required to make good the said amounts, it cannot be said at this stage that the Legal Representatives should not be impleaded.
13. In my considered opinion, the learned Joint Registrar has appreciated the controversy in its right context and I find no infirmity in the impugned Order.
14. Consequently, the present appeals are dismissed.
15. In view of the order passed above, the newly impleaded respondents may file a reply to the petition within 6 weeks from today.
16. Rejoinder, if any, shall be filed within 2 weeks from filing of the reply.
17. Since, the petition is pending for a long time, list for hearing on 09.02.2026 at 3:30 p.m.
18. The amended memo of parties is taken on record.