Kapoor Sons and Co v. M/S Sycorian Matrimonial Services Ltd

1. The present application under Order VII Rule 11 of the Code of Civil KUMAR KAURAV Procedure, 1908 (CPC), has been preferred pursuant to the liberty granted by this Court, vide order dated 14.02.2025.

2. Learned counsel for the defendant, Mr. J.K. Mittal, has advanced the following broad submissions in support of the application:i. That the present suit seeking ejectment, recovery of arrears of rent for the period 01.09.2018 to 01.09.2024, along with water charges from 01.04.2020 till 01.09.2024 amounting in aggregate to Rs. 3,34,17,855/-, as well as damages/occupation charges at Rs. 20,28,715/- per month has been filed and the written statement thereto is placed on record, which contain several preliminary objections touching upon the maintainability of the suit, and the same are reiterated for the present purpose. ii. Referring to the orders dated 17.01.2025 and 14.02.2025, wherein opportunity was granted to the plaintiff to file replication and affidavit of admission/denial, which was not availed, and no vakalatnama has been placed on record by new counsel despite undertaking, it was urged that the plaintiff has failed to comply with procedural requirements, and that the suit has been filed malafidely, without locus standi, and by suppression of material facts. iii. Learned counsel further submitted that even when the plaint is taken at face value, substantial parts of the claim are barred by limitation, inasmuch as, arrears of rent and water charges prior to 11.10.2021, are beyond three years. iv. Learned counsel further contended that the plaint has been artificially valued so as to invoke the jurisdiction of this Court. v. He has further contended that the plaint is barred in view of Section 12A of the Commercial Courts Act, 2015, as the preinstitution mediation in respect of the cause of action has not been properly undertaken. vi. It was also contended that the suit is barred under Section 69(2) of the Indian Partnership Act, 1932, since no registered partnership deed or proof of registration has been produced. vii. Learned counsel has contended that the plaintiff has no locus standi, as the lease deed dated 13.08.2015 was executed with a proprietorship concern, namely M/s Kapoor Sons & Co., which ceased upon the death of its proprietor, late Mr. O.P. Kapoor, on 12.02.2017. viii. Learned counsel further contended that Civil Suit No. 3817 of 2016, concerning the same property is already pending before the District Court at Saket. The certificate of registration of partnership placed on record is also alleged to be fabricated, containing contradictions regarding the date of death of Mr. O.P. Kapoor. ix. The non-production of the alleged registered lease deed dated 20.05.2019 was also highlighted, it being urged that, if such lease is relied upon, the cause of action would not even arise during its subsistence. x. The plaintiff, claiming to be a partnership firm of the same name, is a distinct legal entity and has no privity of contract with the defendant. xi. Further objections as to the contents of the affidavit filed with the plaint have been raised, stating that the same is false and misleading, wherein one Shri Anil Kapoor described himself inconsistently as “proprietor,” “partner,” and “partner of the company,” though the plaintiff is claimed to be a partnership firm. The authority letter relied upon has also been alleged to be undated and defective.

3. Broadly on these grounds, learned counsel for the defendant submitted that the present suit is an abuse of the process of law, supported by fabricated documents, and is therefore liable to be rejected under Order VII Rule 11 CPC.

4. The submissions advanced by the learned counsel for the defendant are vehemently opposed by Mr. Harish Malhotra, learned senior counsel appearing for the plaintiff, who has advanced the following broad contentions:i. The plaint, when read as a whole, contains all necessary averments disclosing a clear cause of action against the defendants and also setting out the legal status of the plaintiff as the landlord. ii. Referring to paragraphs 1 and 9 of the plaint, wherein it has been specifically pleaded that the plaintiff is a partnership firm, duly registered, and entitled to maintain the present proceedings, it was contended that these averments, supported by annexed documents, suffice at the threshold stage to repel any challenge under Order VII Rule 11 CPC. iii. Although certain discrepancies were pointed out by the defendants, those arise only from the transition of the business from its earlier form. It was sought to be clarified that while a partnership existed earlier, a fresh partnership was constituted after dissolution of the former, and the business thereafter continued seamlessly under the same name and style. iv. It was submitted that a duly executed partnership deed dated 18.02.2017 had been brought on record, whereby the new partnership was created and registered with the Registrar of Firms. v. In this regard, reliance was placed upon the acknowledgment of registration issued by the Registrar on 13.06.2017, which has also been filed. According to him, this material sufficiently demonstrates the continuity of the plaintiff firm, notwithstanding the objections raised by the defendant. vi. The defendant has consistently paid rent and/or damages to the plaintiff under the name and style of M/s Kapoor Sons & Co., has deducted TDS in the name of the plaintiff firm, and has also paid GST to the credit of the plaintiff firm, which has been duly reflected in the statutory filings of both parties. vii. Therefore, according to learned senior counsel, the landlord– tenant relationship between the parties stands admitted by conduct, and the defendants are estopped from denying the locus of the plaintiff at this stage. viii. With regard to the objections raised against the affidavits and the authorisation to file the suit, it was submitted that the plaint has been instituted through Mr. Anil Kapoor, who is a duly authorised partner of the plaintiff firm. ix. The authorisation letters executed by the other partners have been filed along with the plaint. Any reference in the affidavits or use of the earlier rubber stamp of the firm, dating back to the period when the concern was run by late Mr. O.P. Kapoor as a proprietorship, was inadvertent and technical in nature. x. Such clerical irregularities, it was urged, cannot defeat the substantive rights of the plaintiff firm, particularly where the tenancy itself has been continuously acknowledged by the defendant. xi. Learned senior counsel further apprised the Court that an application under Order VI Rule 17 CPC (IA No. 8443/2025) has been filed by the plaintiff seeking amendment of paragraph 26 of the plaint. xii. It was explained that while drafting the plaint, an inadvertent typographical error had crept in regarding the date and tenure of the last lease deed, which had been incorrectly mentioned as “20.05.2019 for 9 years,” whereas the correct position is that the lease deed dated 13.08.2015 was executed for a period of 11 months. xiii. It was urged that the amendment application has been filed bonafide to rectify this error, and that pendency of this application has occasioned some delay in filing replication. xiv. As regards compliance with Section 12A of the Commercial Courts Act, 2015, learned senior counsel submitted that the plaintiff had duly invoked pre-institution mediation, and the proceedings before the Delhi State Legal Services Authority were closed as “non-starter” on account of non-participation of the defendant. The closure report dated 26.08.2022 was pointed out as being part of the record of the suit. It was contended that the statutory requirement stands fully satisfied and the objection taken by the defendant is misconceived. xv. On the plea of limitation, it was submitted that the claim of the plaintiff arises out of a continuing obligation of the defendant to pay rent and charges for use and occupation of the premises, and that the cause of action is recurring in nature. xvi. On limitation, learned senior counsel contended that the issue in the present case is a mixed question of fact and law, which cannot be adjudicated at the preliminary stage of Order VII Rule 11. xvii. Learned senior counsel finally submitted that the objections urged by the defendant traverse disputed factual questions, such as the ownership, the validity of succession, the authority of the partner of the plaintiff, and the extent of arrears.

5. All these matters, according to him, are issues to be framed and tried on evidence, and cannot be summarily adjudicated at the threshold under Order VII Rule 11 CPC.

6. Learned senior counsel therefore prayed that the present application is misconceived, vexatious, and deserves to be dismissed with costs.

7. I have considered the aforesaid submissions and perused the record.

8. So far as the legal position governing the adjudication of an application under Order VII Rule 11 of the CPC is concerned, the same stands well settled by the Supreme Court. Reference may be made to T. Arivandandam v. T.V. Satyapal & Anr[1], where the Court held that if, on a meaningful, not merely formal, reading of the plaint, it appears to be vexatious, meritless, or barred by law, the Court must reject it at the threshold to prevent abuse of the process of law.

9. The principle was further elaborated in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I[2], where the Supreme Court observed that whether a plaint discloses a cause of action must be ascertained from the plaint itself, and that if the averments made therein are taken in their entirety as correct, the test is whether a decree would follow. In Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra)3, the Supreme Court reaffirmed that the plaint must be examined as a whole, in conjunction with the documents relied upon, and if it is apparent therefrom that the suit is barred by law, the plaint is liable to be rejected without subjecting the matter to a detailed trial.

10. There appears to be no dispute on the legal proposition advanced by Mr. Mittal that a proprietorship concern cannot be equated either with a company or with a partnership firm. As rightly submitted, a proprietorship concern is not a juristic entity in law; it is merely the trade name under which an individual carries on business, without any separate legal personality.

11. In the present case, however, the plaint specifically describes the plaintiff as a partnership firm. In paragraph 1 of the plaint, it is averred that the plaintiff, M/s Kapoor Sons and Co., is a duly registered partnership firm under the Indian Partnership Act, having its registered office at AB-1, Community Centre, Kamal Cinema Building, Safdarjung Enclave, New Delhi – 110029.

12. Further, in paragraphs 8 and 9 of the plaint, the plaintiff asserts that after the demise of Shri O.P. Kapoor, the defendant accepted the plaintiff firm as its landlord and commenced paying rent to M/s Kapoor Sons and Co., consisting of the legal heirs of Shri Kapoor. Read together, paragraphs 1 and 9 indicate the plaintiffs’ stand that the defendant has, by conduct, recognised the plaintiff partnership firm as its landlord.

13. Mr. Mittal has strongly contested this position. He submits that the averments made in the plaint must be examined against the backdrop of the documents produced by the plaintiff itself. According to him, the agreement dated 13.08.2015, which forms the basis of the dispute, was executed with the proprietorship concern, and not with any partnership firm. The plaintiff, on the other hand, contends that upon the death of Shri O.P. Kapoor, the business that was earlier carried on has continued through a newly constituted and separately registered partnership firm under a deed dated 18.02.2017. This assertion, at the present stage, cannot be brushed aside.

14. Some of the clauses of the partnership firm dated 18.02.2017 are being looked into which are extracted as under:- “WHEREAS, the parties of the Second and Third parts along with late Shri O.P. Kapoor during his lifetime had entered into a Deed of Partnership dated 08.05.2014 and agreed to carry on business under the name and style of Kapoor Sons & Co, which was earlier being carried out by Shir O. P. Kapoor as the sole proprietor thereof.

AND WHEREAS as per the said partnership deed Shri O. P. Kapoor was a partner to the extent of 60%, while the parties of the second and third parts were partners to the extent of 20% each. After execution of the said partnership deed, the said firm was got registered with the Registrar of Partnership Firms on 30.05.2014.