Research › Browse › Judgment

Delhi High Court · body

1996 DIGILAW 238 (DEL)

BABAR AHMED MUTAKIF v. QUTAB OASIS

1996-03-01

S.K.MAHAJAN

body1996
S. K. MAHAJAN ( 1 ) 16th February, 1993 the plaintiff and defendant No. 2 had entered into a partnership to run a restaurant under the name and style of "the Qutab Oasis" at the premises forming part of the plot of land at Khasra No. 669/27. Aurobindo Marg, Mehrauli Road, New Delhi. The said plot of land was owned by the father of the plaintiff and had been given on license to him. Some of the terms and conditions of the partnership deed were as under: - "1. That the partnership business shall be that of a Restaurant/dhaba, sale of raw chicken products from Arslan Farms and shall be carried on at 669/27, Aurobindo Marg, Main Mehrauli Road, New Delhi. 2. That the name and the style of the Partnership Firm shall be The Qutab Oasis. 3. (i) That the party of the first part (i. e. the plaintiff) shall provide with the open piece of land, one room, verandah on the ground floor and the hall on the first floor and the party of the second part (i. e the Defendant) shall invest the required working capital and provide know-how etc. etc. (ii) That the Partnership shall carry on the business in the said premises. (iii) That the party of the second part will have no right of title to or interest in the said premises i. e. 669/27, Sri Aurobindo Marg, New Delhi. (iv) That the party of the first part alone shall be entitled to the premises. He will remain in exclusive possession of the premises. 5. That the profit and loss of the firm shall be divided equally between both the parties. 6. That the proper books of accounts shall be maintained regularly which shall be kept at the place of business and both the parties will have the right to inspect the same. 7. (i) That no party shall create any liability or take any loan or any encumbrances, charges and lien whatsoever in respect of the partnership firm or in respect of the premises i. e. 669/27, Sri Aurobindo Marg, Mehrauli Road, New Delhi. (ii) That each partner shall attend to the work diligently. 8. That the partnership shall be at will which may be determined by the either party after giving a notice in writing to the other party. (ii) That each partner shall attend to the work diligently. 8. That the partnership shall be at will which may be determined by the either party after giving a notice in writing to the other party. " ( 2 ) THE partnership, it appears, could not function properly and the plaintiff, therefore, by a notice dated April 6, 1995 dissolved the firm and the present suit has been filed for rendition of accounts of the business of the firm and for a declaration that the firm stood dissolved by giving of the said notice. Alongwith the suit, an application under Order 39 Rules 1 and 2 Civil Procedure Code was filed for an injunction restraining the defendant No. 2 from opening the restaurant in violation of the terms of the partnership and from transferring or alienating the property in dispute to any other person. ( 3 ) A local commissioner was also appointed by the Court to find out as to who was in possession of the premises. The local commissioner, after inspection of the premises made a report that while the keys of the main gate of the premises were with the chowkidar of the restaurant, the keys of the back gate were with the Manager. The keys of the office were with the plaintiffs brother and Manager of the restaurant and the keys of the safe in the lobby were also with the plaintiff s brother. It was also observed by the local commissioner that keys of the filing cabinet in the office were with the Manager of the restaurant. ( 4 ) THE defendant in the written statement has not denied that the plaintiff was a licencee of the plot in question and it was he who had allowed the partnership firm to carry on business thereon. The contention of the defendant, however, on merits is that the plaintiff did not have any right to terminate the partnership because the defendant had spent Rs. 65-70 lakhs in the restaurant and till such time this mount was paid back to the defendant, he has a right to continue the business. It is also stated in the written statement that the defendant had been raising construction for the restaurant when the Delhi Development Authority demolished the same on account of the same being unauthorised. 65-70 lakhs in the restaurant and till such time this mount was paid back to the defendant, he has a right to continue the business. It is also stated in the written statement that the defendant had been raising construction for the restaurant when the Delhi Development Authority demolished the same on account of the same being unauthorised. ( 5 ) IT is an admitted fact that no license has been granted by the Commissioner of Police to run the restaurant and the restaurant was being run without a license. It is also not disputed that defendant No. 2 came into possession of the premises only as a partner of the firm and dehors the firm, the said defendant has no right to continue to remain in possession. The question as to whether defendant No. 2 is entitled to run the restaurant till such time he is able to recover his investments is, in my opinion, not relevant at this stage as it is a question which has to be decided at the time of rendition of accounts as to what amount each of the erstwhile partner of the firm is entitled after dissolution of the firm. There were some proceedings which were initiated under Section 145 of the Code of Criminal Procedure and in those proceedings statement of defendant No. 2 was recorded. It was admitted by the said defendant in his statement before the Sub-Divisional Magistrate that he had no right or title in the property and that the firm was duly dissolved and notice of the termination was served. ( 6 ) THERE is thus no dispute that the firm stands dissolved. The only question, therefore, is whether the defendant can be allowed to continue to run the same business which the firm w as carrying on even after dissolution of the firm. Under Section 53 of the Partnership Act, after a firm is dissolved even partner or his representative may in the absence of a contract between the partners to the contrary, restrain any other partner or his representative from carry ing on a similar business in the firm name or from using any of the properties of the firm for his own benefit, untill the affairs of the firm have been completely wound up. In fact, if there is an apprehension of any danger or waste of the suit property, the Court, as a matter of course, will feel inclined to prevent that by putting a receiver incharge of the same but this will be only in a case where the partnership is continuing. After the partnership has come to an end, no partner can continue to carry on the business of the firm in the firm name nor can he use the property of the firm. It may be true that the defendant had invested a lot of money in the restaurant and he may be entitled to take back the same, how ever, these are the questions which have to be decided only at the time of rendition of accounts. In my opinion, that cannot be a reason to allow the defendant to continue to run the business which was being carried on by the firm in the name of the firm and in the property which belong to the plaintiff and was being used as the restaurant by the firm. It will be clearly in violation of the statutory provisions of Section 53 of the Partnership Act. The defendant has no right to carry on the business in the property of which the plaintiff was a licencee and in which the partnership w as allowed to carry on its business. The plaintiff has, therefore, made out a prima facie case for the grant of an injunction. Balance of convenience is also in favour of the plaintiff restraining the defendant from using the partnership property after its dissolution. Moreover, admittedly the restaurant was being run without any license and. therefore, the defendant cannot be allowed to run the same as the same would be in violation of rules. ( 7 ) FOR the foregoing reasons, I restrain the defendant from carry ing on the business of the restaurant The Qutab Oasis from the premises being Khasra No. 669/27, Aurobindo Marg, Mehrauli Road, New Delhi till final decision of the suit. It is, however, made clear that the plaintiff will also not use any of the partnership assets or transfer or alienate them till the matter is finally decided. With a view, however, to ascertain as to what are the assets of the partners, I appoint Mr. It is, however, made clear that the plaintiff will also not use any of the partnership assets or transfer or alienate them till the matter is finally decided. With a view, however, to ascertain as to what are the assets of the partners, I appoint Mr. Vijay Chaudhary, Advocate, as the local commissioner to make an inventory of all the assets of the firm and also to sign the books of accounts of the firm lying in the restaurant. He shall be paid a fee of Rs. 5,000. 00 for executing the commission. Fee in the first instance shall be paid by the plaintiff. Commission will be executed after notice to the parties. ( 8 ) WITH these observations, the application is disposed of with no order as to costs.