TaxTMI 
TaxTMI 
2021 (6) TMI 553
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.... (2) B. Latha (3) B. Jayashree (4) P. Sivanantham and (5) Mahalakshmiammal Trust. Subsequently, the said Firm was reconstituted by inducting the wife of P. Sivanantham. Under these circumstances, all the partners have entered into a Memorandum of Understanding on 10.08.2006, whereby, the partners viz., R.P. Sarathy, B. Latha, B. Jayashree and Mahalakshmiammal Trust agreed to retire and P. Sivanantham would continue as a partner after inducting his wife Mrs. Lalitha as one of the partners. 3. As per Memorandum of Understanding, Mr. P. Sivanantham is liable to pay a sum of Rs. 26.5 crores towards the final settlement to the retirement of all the revision petitioners as well as Mahalakshmiammal Trust. The said amount was also paid by Mr. P. Sivanantham. After the execution of Memorandum of Understanding, the first respondent Firm has been completely under the control of Mr. P. Sivanantham and his wife, who are the only partners of the said Firm. The said Firm viz., Narasu's Company was converted into Sri Narasu's Coffee Company Limited with effect from 01.04.2009. In this regard, Exs. P.26 (True copy of the order of Memorandum and Articles of Association) and P.27 (Xerox co....
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....mplement the same. Since the suit in O.S. No. 106 of 2009 was dismissed and the Apex Court has also upheld the Memorandum of Understanding entered into among the partners in the year 2006, the prayer for 22.5% shares in the 27 items does not arise by virtue of the order passed by the Apex Court, the entire properties belonging to the erstwhile partnership firm and it will become property of Company subsequent to conversion of the partnership Firm into Sri Narasu's Coffee Company Limited. Therefore, the amendment in the pleadings was sought for by the plaintiff in I.A. No. 141 of 2014 in O.S. No. 50 of 2012. Consequently, the prayer for declaration and permanent injunction was sought for in the amendment. The same was challenged in CRP (PD) No. 3010 of 2016. This Court by order dated 28.11.2016 set aside the order dated 31.7.2015, restored the application in I.A. No. 141 of 2014 and remanded the matter for re-consideration. 8. Accordingly, after hearing both the parties, the Court below allowed I.A. No. 141 of 2014 and permitted the respondent to amend the plaint. Challenging the above order, the present Civil Revision Petition has been filed. 9. Mr. T.R. Rajagopalan, lear....
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....en this point was raised before the Court below, the Court below, instead of considering the limitation on merit, it has simply rejected the plea stating that the plea of limitation would be considered at the time of trial. 11. Learned Senior Counsel contended that the said order is not proper. There is no bar for the Court to consider the plea of limitation at the time of considering the amendment of the pleading. Therefore, learned Senior Counsel contends that the decreetal order is not proper and liable to be set aside. 12. Yet another point raised by the learned Senior Counsel is with regard to amendment of prayer in the suit. Originally, prayer was sought for partition and permanent injunction. Now, the respondent/plaintiff wants to amend the prayer for declaration and permanent injunction. The plaintiff wants to claim the entire properties as his property and therefore, they sought for an amendment. The said amendment also would change the basic structure, nature and character of the relief sought for in the suit earlier. Therefore, learned Senior Counsel submitted that the amendment sought for in the application is not proper and the same is liable to be rejected. 1....
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....regard to benami transaction. The Court below held that Benami Transactions (Prohibition) Act, 1988 will not apply. In an amendment petition the Court below held that without any trial, Benami Transactions (Prohibition) Act, 1988 will not apply. The said finding is liable to be set aside and prays to allow the Civil Revision Petition. 17. Per contra, Mr. AR.L. Sundaresan, learned Senior Counsel appearing for the second respondent would submit that originally suit was filed for partition by the plaintiff due to the reason that in the year 2009, Mr. R.P. Sarathy filed a suit in O.S. No. 106 of 2009 for partition to divide six items of property, whereby, he refused to accept Memorandum of Understanding dated 10.08.2006. The Firm has filed a suit in O.S. No. 1019 of 2009 for partition of 27 items of properties of erstwhile Firm. Subsequent to the dismissal of the suit in O.S. No. 106 of 2009, all the parties are bound to implement the terms and conditions of the Memorandum of Understanding. In the Memorandum of Understanding, it has been clearly mentioned that what are all the properties can be retained by the partners and what are all the properties can be transferred to the other ....
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....at the time of filing the suit, the Firm is not in existence. Therefore, the plaintiff's name was wrongly mentioned. It should have been mentioned as M/s. Sri Narasu's Coffee Company Limited instead of Narasu's Coffee Company by P. Sivanantham. The suit cannot be filed by a non-existent person. However, learned Senior Counsel fairly admits that the Firm was converted into Narasu's Coffee Company Limited with effect from 01.04.2009 and subsequent to that, suit was filed in the name of the Company in O.S. No. 1016 of 2009. But the present suit was inadvertently filed in the name of the Firm. Learned Senior Counsel submits that at any cost, the suit cannot continue in the name of the Firm, which is non-existent one and the same should be substituted with the Company's name under the name and style of M/s. Sri Narasu's Coffee Company Limited. 19. As far as amending the prayer is concerned, learned Senior Counsel submits that initially by virtue of the partition, the plaintiff tried to get 22.5% and since the entire right in the property has been crystalised/confirmed to and in favour of the plaintiff, subsequent to the dismissal of the suit in O.S. No. 106 of....
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....f the Firm into Company, the Firm will not exist. An application was filed under Order I Rule 10 of Civil Procedure Code to amend the cause title from Narasu's Coffee Company to Sri Narasu's Coffee Company Limited. It means that the suit was originally filed in the name of non-existent person. Therefore, the plaintiff sought to amend the same. The fact remains that the Firm was not in existence at the time of filing of the suit in O.S. No. 50 of 2012. At this juncture, it is relevant to extract Clause (1) of Order I Rule 10 of Civil Procedure Code which states as follows:-" Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the suit, if satisfied that the suit has been instituted through a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as the Court thinks just." 24(a). A perusal of clause(1) of Order I Rule 10 of Civil Procedure Code would show that in the event if a suit has been institute....
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....ought for adding or deleting the suit schedule properties. Ultimately, the Court has to decide the entitlement of the plaintiff in the suit schedule properties. 30. Initially, the plaintiff claimed 22.5% right in the suit schedule properties. Now, the claim of the plaintiff is 100% in the suit schedule property. The reason for changing the plaintiffs entitlement from 22.5% to 100% is subsequent to the validation of Memorandum of Understanding dated 10.08.2006 by this Court as well as Apex Court. According to the plaintiff, as per the Memorandum of Understanding Mr. P. Sivanantham is liable to pay a sum of Rs. 26.5 crores towards the final settlement to the retirement of all the revision petitioners as well as Mahalakshmiammal Trust. If at all there is any obligation on the part of either of the parties, it is their duty to perform the same. In the absence of performance of any of the terms and conditions by either of the parties, it is for the respective parties to claim their right in the manner known to law. 31. Now, the plaintiff's contention is that 27 items of properties in the suit schedule were purchased out of the funds of the Firm. The properties are in the name ....
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.... properties purchased in the name of any other individual and Firm etc., who are not parties to the Memorandum of Understanding would not bind the plaintiff, in which case, the plaintiff is entitled to take appropriate action to recover the possession of the property. Obviously it is an important issue which has to be decided by the Court below not at the stage of the amendment of the pleading, but it can be decided only after full fledged trial. Therefore, it is for the Court below to decide and frame appropriate issue if so desired by the parties. 34. Even this Court is of the view that the right claimed by the plaintiff in the suit is not proper. Subsequent to the amendment of pleadings only, it would be proper. Initially, one of the partners viz., P.Sivanantham claimed that he is entitled for 22.5% shares in the Firm and therefore the said share should come to the Company. This way of laying the claim is not proper. 35. Bestowing my thoughtful consideration to these aspects, this Court is of the considered view that a Firm/Company cannot file a suit for partition on behalf of one of the partners to claim his share and thereafter to treat it as firm/company property. The F....