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2004 DIGILAW 467 (CAL)

MAYARANI CHATTERJEE v. GOURANGA LAL CHATTERJEE

2004-07-13

ALOKE CHAKRABARTI, ANIRUDDHA BOSE

body2004
BOSE, J. ( 1 ) THE judgment of the Court was as follows : the dispute in the present appeal relates to a partnership firm M/s. Gouranga Lal Chatterjee, which is admittedly under dissolution. This firm is primarily a family business engaged in construction work and at this stage the main concern of the appellants, who represent roughly 26 per cent interest in the firm, is to prevent what they allege, mis-utilisation of the funds of the firm. The respondents appear to be in effective control of the firm deny such allegations. There is some dispute as regards the date of constitution of the firm. The firm was originally constituted in the year 1996. The contention of the appellants is that it was reconstituted on 1. 4. 2000 and then the share of the appellants go up by about 4 per cent. But the respondents contention is that the said process of reconstitution was never complete and the firm is running in the same character as it was constituted in the year 1996. ( 2 ) BE that as it may, it is now the admitted position that the subject firm is under the process of dissolution in view of a letter for dissolution issued on behalf of the appellant No. 2 and by their solicitor T. Banerjee and co. on 15th November, 2003. ( 3 ) SUBSEQUENT to issuance of such letter of dissolution it is alleged by the petitioner/respondents that the appellant No. 2 through his learned advocate had caused a letter to be written to the main banker of the said firm communicating to them the said factum of dissolution. It is alleged by the respondents that acting in pursuance of the said letter the said Bank had not only stopped operation of the account of the said firm but also of the savings account of the appellants and their family members. ( 4 ) THE Deed of Partnership of 1996 carried an arbitration clause for resolution of dispute arising between the partners. On the strength of such clause the respondents had approached the Court of the learned District judge, Alipore with a prayer for "an order of temporary injunction till dissolution of the firm M/s. Gouranga Lal Chatterjee, proforma respondent No. 1 temporarily till the dispute between the partners of the said firm, being petitioner Nos. 1 to 6 and the respondent Nos. 1 to 6 and the respondent Nos. 2 and 3 is finally adjudicated through arbitration and to enable the said firm in the meantime, to complete its pending contracts, realise its Book Debts and pay of its creditors and pass such further order on orders and/or direction as your Honour may deem and proper and an order of interim injunction be passed to the above effect. " ( 5 ) THE said prayer was made in an application made under Section 9 of the Arbitration and Conciliation Act, 1996. The substance of the allegation of the petitioners is that because of such stoppage of operation of the accounts the business of the firm stopped. ( 6 ) IN course of hearing before us and it appears also before the learned trial Judge it was argued on behalf of the appellants that under Section 47 of the Indian Partnership Act, 1932, a partnership firm is entitled to proceed with the ongoing projects only which remain unfinished at the time of dissolution. The respondents contended that the firm had substantial ongoing projects and for their completion, operation of its bank account is absolutely necessary. The learned Trial Judge by an order dated 30th March, 2004 allowed the petition of the petitioners and passed an order to the following effect:"the respondent Nos. 2 and 3 are restrained by an order of temporary injunction so that fhey may not create any disturbance in the smooth running of the business of the firm named M/s. Gouranga Lal Chatterjee (respondent No. 1) till the decision of the arbitration proceeding and they are further restrained from disturbing the dealings of the bankers of the firm and other authorities which are connected and close to the dealings and affairs of the said firm till the decision arrived at in the arbitral proceeding. The order No. 2 dated 23rd december, 2003 stands confirmed with the extent of modification as indicated hereinbefore. All the issued are disposed of accordingly. " ( 7 ) IN the present appeal, the legality of this order is under challenge. The main case of the appellants is that they are entitled to bring to the notice of the bankers and other interested persons the factum of the dissolution of the said firm. All the issued are disposed of accordingly. " ( 7 ) IN the present appeal, the legality of this order is under challenge. The main case of the appellants is that they are entitled to bring to the notice of the bankers and other interested persons the factum of the dissolution of the said firm. It is also alleged that substantial sums of money belonging to the firm was being siphoned out to personal accounts of the partners belonging to the majority group, and the bank was acting according to their own understanding of the legal position. It is further contended on behalf of the appellants that they are not being allowed to participate in the business of the firm in dissolution and for that reason if the entire control of the finances of the firm is left at the hands of the majority group, the appellants Would be seriously prejudiced. In course of hearing before us attempt was made to work out a solution for resolving the dispute but the relationship between the parties appear to be such that an amicable settlement in this matter do not appear to be possible. ( 8 ) THE respondents have denied that they had kept the appellants out of the business or that they had mismanaged the funds of the firm. They have alleged that by writing prejudicial letters the appellants have disturbed the business of the firm seriously. ( 9 ) DURING the pendency of the appeal, a learned Advocate/receiver was appointed on the application filed by appellant in present appeal as complaint of the appellant was that they are not only being not allowed participation in the business of the firm but also are not allowed access to the records of the firm though under Section 47 of the Partnership Act, after notice for dissolution, business of firm is to be carried on for the purpose of smooth winding up of the business. ( 10 ) AT the time of hearing of the appeal, contentions of appellants are that resolutions in the meetings held by the learned Advocate/receiver show that initially records were not being made available by the respondents even before learned Advocate/receiver in spite of Court's order. Contention of Mr. ( 10 ) AT the time of hearing of the appeal, contentions of appellants are that resolutions in the meetings held by the learned Advocate/receiver show that initially records were not being made available by the respondents even before learned Advocate/receiver in spite of Court's order. Contention of Mr. Chowdhury, learned Counsel for the appellants is that his clients are entitled to full participation in the business and the respondents are not to be allowed to take out funds form partnership business nor they are entitled to withdraw money for personal drawings and only ongoing projects can go on upon full participation of the appellants also. ( 11 ) MR. Mukherjee, learned Counsel for respondents contended that they had no intention to keep the appellants out of the business and appellants never initiated any proceeding complaining their ouster from business and they only disturbed partnership business by writing to bankers and other relevant parties which in effect stopped functioning of the firm compelling the respondents to approach the Court of law for appropriate protection. ( 12 ) CONSIDERING the contentions of parties and materials-on-record, we find that admittedly till the disputes are resolved in the arbitration proceeding, the ongoing projects are to be completed. From the materials-on-record, we find that the respondents are in helm of affairs of the firm. For smooth carrying on of the business to the extent, it involves the ongoing projects and that too allowing both the parties to participate, keeping note of the fact that parties have fallen apart, smooth functioning by the parties, jointly is not possible, and we direct the learned Advocate/receiver already appointed to continue on same terms. For smooth carrying on of the ongoing projects, there will be a committee of the partners constituted, comprising of two representatives from the respondents who hold larger share and one representative from appellants, who have smaller share in the firm. The appellants and the respondents will communicate the names of the partners as their respective respresentatives in the committee to the learned Advocate/ receiver within a week from date. The Committee will hold meeting under the chairmanship of the receiver at least fortnightly for deciding all relevant matters relating to the running of the partnership firm for the purpose of winding up. The Committee will hold meeting under the chairmanship of the receiver at least fortnightly for deciding all relevant matters relating to the running of the partnership firm for the purpose of winding up. ( 13 ) IN respect of actual work in the sites of the ongoing projects, decisions will be taken by the respondents as regards day to day work. Either of the parties will be entitled to give suggestions as regards such business in the meeting of the Committee under learned Advocate/receiver where matters will be resolved in presence of learned Advocate/receiver. ( 14 ) RESPONDENTS will inform the receiver within two weeks from date the average monthly expenditure, amount equivalent to which can be withdrawn monthly by respondents from bank account by cheque for meeting the day to day expenditure of business. If necessity arises for incurring expenditure for a large sum, such requirement will be communicated by the respondents to the learned Advocate/receiver who, in turn, will inform the same immediately to the appellants representative in the Committee and in absence of any objection raised by the appellants within three days from such communication, respondents will be entitled to spend such amount from the firm's bank account by cheque in case the appellant raises objection, learned receiver/advocate will take the decision as regards such expenditure and only when permission is obtained from the learned Advocate/receiver after such objection by the appellants, respondents will be entitled to withdraw the same from the bank account of the firm. In case any party feels aggrieved by any such large expenditure, he/she will be entitled to obtain appropriate order from the Court. ( 15 ) THE respondents will make all transactions in respect of the funds of the firm by cheque from the bank account of the partnership firm and no money should be received by either of the parties in cash. ( 16 ) THE respondents will liquidate dues in the overdraft Account with central Bank of India from funds of partnership business including the amounts of the firm lying in Fixed Deposites in Banks. ( 17 ) THE appeal and the applications are disposed of as above. We make in clear we have not decided the contentions on ment. Let a xerox plain copy of this order duly countersigned by the Assistant registrar (Court) be given to the learned Counsel for both the parties on usual undertaking.