JUDGMENT : - Bhaskar Bhattacharya, J.: This first miscellaneous appeal is at the instance of a plaintiff in a suit for declaration of dissolution of a partnership firm and for accounts and is directed against order dated October 7, 1988 passed by the learned Judge, 11th Bench, City Civil Court, Calcutta in Title Suit No. 853 of 1988 thereby rejecting an application for appointment of a receiver over the disputed business. 2. The appellant herein filed the aforesaid suit being Title Suit No. 853 of 1988 for declaration that the partnership firm, carried on business under the name and style of 'Guddu Steel Emporium', stood dissolved with effect from May 16, 1988 and for preliminary decree for accounts to be followed by a final decree in accordance with law and the case made out by the appellant was as follows : 3. The appellant and the respondents were carrying on partnership business of stainless steel utensils under the name and style of 'Guddu Steel Emporium'. Each partner had equal share in the business and the said partnership was duly registered with the Registrar of Firms, Calcutta under Registration Number being L-33488 and the date of registration was July 27, 1986. The said partnership was all along being controlled and managed by the respondent No. 1 and he was also entrusted with the writing and maintenance of books of accounts and keeping of cash and other assets of the business. Each of the partners was allowed to draw such sum as was permissible depending on the condition of the business. According to the appellant, since the inception of the partnership, the respondents did not pay the appellant his share of profit in the partnership business except for occasional drawings as aforesaid and further refused to allow inspection of accounts of the firm inspite of demand. Under the aforesaid circumstances, the appellant was compelled to dissolve the partnership business which was a partnership at will by his learned advocate's letter dated April 30, 1988. Hence the suit for declaration and accounts. 4. After the filing of the aforesaid suit, on the aforesaid allegations, the appellant filed an application under Order 40 Rule 1 of the Code of Civil Procedure for appointment of a Receiver over the business which is the subject matter of the suit. 5.
Hence the suit for declaration and accounts. 4. After the filing of the aforesaid suit, on the aforesaid allegations, the appellant filed an application under Order 40 Rule 1 of the Code of Civil Procedure for appointment of a Receiver over the business which is the subject matter of the suit. 5. The aforesaid application for appointment of Receiver was opposed by the respondents by filing joint written objection thereby denying material allegations made in the plaint as well as the application for appointment of Receiver and the defence taken by the respondents was that they are merely a sub-tenants under the appellant at a monthly rental of Rs. 600/- according to English calendar and entered into a fake partnership with the specific understanding that the appellant would not claim any right in the business but would only be interested in getting the rent at the rate of Rs. 600/- a month from the respondents. According to the respondents, the alleged partnership was never meant to be acted upon by the parties and for the purpose of avoiding eviction of the appellant, who was a tenant under the superior landlord, such agreement was entered into by the parties. The further defence of the respondent was that they all along paid rent month by month at the rate of Rs. 600/- per month but no rent receipt was granted by the appellant. 6. The learned trial Judge on consideration of the materials on record held that the appellant had failed to prove a prima facie case so as to obtain an order of appointment of receiver over the business and as such dismissed the said application. 7. Being dissatisfied, the appellant has preferred the instant first miscellaneous appeal. 8. Mr. Roychowdhury the learned senior advocate appearing in support of this application has contended that the respondents allegation that the partnership was only a paper transaction can be gone into at the time of trial after taking evidence, but in view of the materials on record the learned trial Judge ought to have held that the appellant has made out a strong prima facie case to go for trial and in the circumstances, the respondents should not be permitted to carryon with the business by depriving the appellant of his legitimate dues. Mr. Roychowdhury contends that in this type of a case a Receiver should be appointed. 9. Mr.
Mr. Roychowdhury contends that in this type of a case a Receiver should be appointed. 9. Mr. Dasgupta, the learned senior advocate appearing on behalf of the respondents has on the other hand supported the order impugned in this appeal and has contended that the appellant himself being a tenant under the owner of the building could not sublet the premises without obtaining consent in writing and as such to over come to provision contained in the West Bengal Premises Tenancy Act, created a fake partnership. Since the respondents were in need of an accommodation, they agreed to the proposal of the appellant. Mr. Dasgupta by relying upon Income Tax return submitted by his clients contends that only a sum of Rs. 7,200/- was shown as yearly rent of the business premises indicating that the respondents were subtenants under the appellant at the rate of Rs. 600/- a month. Mr. Dasgupta further contends that the appellant failed to prove investment of any amount in the alleged partnership. Thus, Mr. Dasgupta continues, the business is a partnership business of the two respondents and at the instance of the appellant no Receiver should be appointed. In support of such contention Mr. Dasgupta relies upon an English authority in the case of Floydd vs. Cheney, reported in 1970 (1) Ch. D. 602. Mr. Dasgupta further relies upon the observation of the author in "A treaties on Law of Receiver" by James L. High (Fourth Edition) at page 684. 10. In Floydd vs. Cheney (supra), the plaintiff engaged X as an assistant with a view to partnership. Later, heads of agreement were signed whereby X was to become an associate. A partnership was expressly negatived but the document provided for a full partnership at some indeterminate future date. A draft partnership deed was prepared but never executed., On the plaintiffs return from abroad, X and Y (an employee) told him that they were leaving him. He discovered that some documents were missing; although some documents were returned, the plaintiff alleged that some documents were still missing. By motion, he asked for return of those documents. In a separate action against plaintiff, X claimed that there was a partnership at will which should be wound up and that a receiver should be appointed.
He discovered that some documents were missing; although some documents were returned, the plaintiff alleged that some documents were still missing. By motion, he asked for return of those documents. In a separate action against plaintiff, X claimed that there was a partnership at will which should be wound up and that a receiver should be appointed. In the fact of the said case, the court held that although there had been some holding out to the world of a partnership, no prima facie case has' been made out and as such the court should not appoint a receiver when the issue as to partnership was yet to be resolved. 11. In our view, the principle laid down in the said case cannot have any application to a case where in the register of firm all the parties have been shown as partners. It is for the respondents to prove at the trial that the partnership was a fake transaction. Therefore, at the stage of hearing of the application, the plaintiff made out a strong prima facie title to the business. 12. We, however, do not dispute the proposition of law that courts rarely interfere by a Receiver in partnership cases unless it is apparent that the plaintiff will be entitled to the relief of dissolution. We are also in full agreement with Mr. Dasgupta that court should be careful to preserve the business and a relief of appointment of Receiver will not be granted when it would destroy the value of the business. As pointed out in the treaties on the Law of Receiver by James L. High. 13. In the instant case, as pointed' out earlier, a strong prima facie title as partner having been made out, we find that the learned trial Judge erred in law in refusing the prayer of plaintiff. However, in view of the admitted fact that the respondent No. 1 was all along looking after the business, we appoint the said respondent No. 1 as Receiver over the business with all power enumerated under Order 40 Rule 1 of the Code without any security and remuneration. The respondent No.1 will furnish quarterly account of the business before the trial Judge after giving a copy of the same to the learned advocate for the plaintiff therein.
The respondent No.1 will furnish quarterly account of the business before the trial Judge after giving a copy of the same to the learned advocate for the plaintiff therein. The respondent No. 1 is directed to pay to the appellant the total amount at the rate of Rs. 600/- a month from the date of institution of the suit till July 1999 within November 30, 1999, and will go on paying a sum of Rs. 600/- a month every month within 15th of the month next following, first of such payment for the month of August must be paid by September 15, 1999. Such payments must be by A/c Payee cheque in the name of the appellant to be handed over to the learned advocate for the plaintiff in the trial court. The plaintiff shall receive such payment with prejudice to the rights and contentions of the parties in the suit. In the event, it is finally decided in the suit that the respondents are subtenants under appellant, the amount paid should be treated as rent and the appellant will not get benefit of default in payment of rent for the period of payment of money. The respondents are however at liberty to withdraw all amount deposited before the Rent 'Controller in the name of the appellant and the appellant will not be permitted to raise any objection to such withdrawal. 14. The learned trial Judge is directed to issue appropriate writ to the respondent No. 1 enabling him to act as Receiver and the appointment should be deemed to have been made by the learned trial Judge and accordingly parties are to approach the trial court for any' future direction. Appeal is thus allowed. Order impugned is set aside. No costs. Amit Talukdar, J. : I agree. Later 16.7.99 It is further ordered that after this order is passed, Mr. Bhattacharya appearing on behalf of the respondents prays for stay of operation of this order. After hearing the learned counsels for the parties, we stay the operation of the order for a period of four weeks from date. If xerox certified copy of the order is applied for, the office will supply the same within a week from the date of application. B. Bhattacharya, J. Amit Talukdar, J. Appeal is allowed. Order impugned is set aside.