The Delhi High Court dismissed the suit for partition and dissolution based on a family settlement, holding that legal title and statutory provisions govern ownership and partnership rights, limiting plaintiffs to specific performance or recovery remedies.
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CS(OS) 29/2020 HIGH COURT OF DELHI Date of Decision: 14th February, 2020.
CS(OS) 29/2020 & I.A. Nos.1230/2020 (u/O XXXIX R-1 & 2 CPC), 1231/2020 (u/O XI R 12 & 14 CPC) & 1232/2020 (for condonation of 3 days delay in re-filing) NAVAL THAPAR & ORS. ..... Plaintiffs Through: Mr.T.S. Ahuja, Adv. with Mr.Varun S. Ahuja, Adv.
1. On 29th January, 2020, when the suit came up first before this Court, the following order was passed: -
“1. The plaintiffs have sued for partition of immoveable properties and dissolution of partnership firms in terms of the Agreement/Family Settlement dated 11th March, 2014 between the plaintiffs and the defendants. 2. As per the averments in the plaint, all the parties were not partners in the partnership firms and/or owners of the properties of which dissolution and/or partition has been sought. Merely because the parties signed an Agreement/Family Settlement agreeing to the properties being joint and further agreeing to partition thereof, irrespective of the title to the properties, would not, in my opinion, make the properties joint in law, in the light of particularly the Prohibition of Benami Property Transactions Act, 1988 which bars the Court from
2020:DHC:1076 recognising any such Agreement/Family Settlement not in accordance with law of transfer of property and seeking the property to be of other than the person in whose name the title thereto is held.
3. Moreover, once according to the plaintiffs, the properties have already been partitioned in the mode provided for in the Agreement/Family Settlement dated 11th March, 2014, the plaintiffs cannot again seek partition and the remedy of the plaintiffs is only to seek specific performance of the unfulfilled part of the Agreement/Family Settlement dated 11th March, 2014. For instance, the plaintiffs are seeking recovery of possession of one of the properties; the plaintiffs have to sue for recovery of possession and not for partition.
4. The same is the position with respect to partnership firms. If the partnership firms have already been dissolved, the reliefs which the plaintiffs would be entitled to, if are able to make out a case of having a right to do so, would be to seek a decree for accounts and/or for recovery of whatever is due on such dissolution and relief of dissolution cannot be sought all over again.
5. The counsel for the plaintiffs states that the plaintiffs, in alternative to the relief of partition and dissolution, have also claimed the relief of rendition of accounts of the partnership firm and recovery of the plaintiffs’ share therefrom.
6. In my view, the plaintiffs are required to take a categorical stand, whether are bound by the partition affected vide the Agreement/Family Settlement dated 11th March, 2014 or are proceeding on the premise that there has been no partition and if are proceeding on the latter premise, to satisfy that they have a share in accordance with law in the properties, title to which is held by others and/or right in the partnership firms, notwithstanding being not a partner thereof.
7. I may record that the law recognises jointness only in the event of existence of a coparcenary and no coparcenary is pleaded. In relation to partnership also, the law distinguishes between partnership firm under the Partnership Act, 1932 and a Joint Hindu Family Business Firm to which the Partnership Act is not applicable.
8. I may further record that though the Benami Law also admits of exceptions but no case of the title holders or the partners being trustees or having held property for the benefit of others, has been pleaded.
9. The counsel for the plaintiffs seeks time to consider.
10. List on 14th February, 2020.”
2. The counsel for the plaintiffs today states that the plaintiffs will seek the reliefs to which they may be entitled to under the Agreement/Family Settlement dated 11th March, 2014 only and do not rely on the Partnership Deeds. It is further stated that since under the Agreement/Family Settlement dated 11th March, 2014, all the assets have already been partitioned/divided, the plaintiffs shall sue, either for specific performance of what the defendants had agreed/undertaken under the Agreement/Family Settlement dated 11th March, 2014 and have not been carried out or fulfilled or for recovery of possession of or monies as may be due to plaintiffs from defendants.
3. The counsel for the plaintiffs seeks adjournment to amend the plaint.
4. As would be obvious from the aforesaid, what the plaintiffs are required to do is a complete overhauling of the plaint and not merely amendment of the plaint. It is thus not deemed appropriate to adjourn the case.
5. The counsel for the plaintiffs however states that the plaintiffs have paid court fees on the plaint and though the plaintiffs on amendment/filing fresh suit, would be required to pay additional court fees but if this suit is disposed of, the court fees paid shall be wasted.
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6. The suit and pending applications are dismissed as withdrawn with liberty to sue for enforcement of obligations of the defendants under the Agreement/Family Settlement dated 11th March, 2014 but on the condition that the plaintiffs, along with the fresh proceedings if any file copies of the plaint in the present suit as well as this order and in the fresh plaint/suit so filed, prominently plead the said aspect.
7. A certificate entitling the plaintiffs to refund of court fees paid less Rs.20,000/-, be issued and handed over to the counsel for the plaintiffs.
RAJIV SAHAI ENDLAW, J. FEBRUARY 14, 2020 aa
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