Sanjay Suganchand Kasliwal v. Jugalkishor Chhaganlal Tapadia
2014-05-09
RAVINDRA V.GHUGE
body2014
DigiLaw.ai
Judgment : 1. Heard Shri P.M.Shah, learned Sr. Advocate i/b Shri S.V. Adwant, Advocate for the appellant and Shri R.F. Totala, learned Advocate for the respondent, at length. 2. The appellant is aggrieved by the impugned order dated 17.4.2014 passed by the learned Principal District Judge, Aurangabad in MARJI No. 103 of 2014. 3. The appellant formed a partnership firm with the respondent on 7.3.2007 under the Partnership Act, 1936. 4. Contentions of Shri Shah, learned Sr. Advocate can be summarised as follows:- (A) The partnership deed gives the partnership firm the name and title of M/s Kasliwal Empire. (B) The partnership deed is signed at Aurangabad. (C) Addresses of both the partners are at Aurangabad. (D) Object of the partnership deed is to construct and develop housing projects at village Satara, district Aurangabad. (E) Registered office of the firm is at Aurangabad. (F) Clause 16(e) prohibits withdrawal of any amount by any partner for his own profit, benefit or use or otherwise except remuneration. (G) Clause 17 of the partnership deed provides for referring any dispute or difference between the parties touching the business of the firm or interpretation of any provision hereof or otherwise relating to the firm and its business, to Arbitration under the Arbitration Act. (H) The respondent herein has preferred Arbitration Application (MARJI) No.414 of 2013 before the District Judge, Aurangabad (hereinafter referred to as “414/2013”). (I) The respondent cannot oppose the maintainability of Arbitration Application (MARJI) No. 103 of 2013 preferred by the appellant ((hereinafter referred to as “103/2013”) on the ground of territorial jurisdiction. (J) A joint account in the name of the appellant and the respondent is opened with the Buldana Urban Cooperative Credit Society Limited, Aurangabad Branch. (K) Rs.500/were credited in the said account on 12.8.2010 by cash for opening the account. (L) On 12.8.2010, an amount of Rs. Nine Crores is deposited in the said account by the Buldana Urban Cooperative Credit Society Limited, Aurangabad Branch as a loan amount. (M) The firm M/s Kasliwal Empire has stood security for the project, for which the loan of Rs. Nine crores has been taken. (N) On 12.8.2010, an amount of Rs. Seven Crores is debited by RTGS transfer and again on 12.8.2010 an amount of Rs. One Crore is debited.
(M) The firm M/s Kasliwal Empire has stood security for the project, for which the loan of Rs. Nine crores has been taken. (N) On 12.8.2010, an amount of Rs. Seven Crores is debited by RTGS transfer and again on 12.8.2010 an amount of Rs. One Crore is debited. Same are credited to the SBI Account of M/s Tapadia Construction Ltd. (O) There are several other entries as regards crediting crores of rupees in the said account and withdrawal of several crores on single dates like 31.8.2010, 8.9.2010 and 9.9.2010. (P) The said Buldana Urban Cooperative Credit Society Limited, Aurangabad Branch has informed the appellant on 7.9.2012 that the respondent has withdrawn Rs. Eight crores on a single date 12.8.2010 by RTGS transfer to the SBI Bank Account of Tapadia Construction Limited. (Q) By sale deed dated 30.12.2013, a property was purchased at Hingoli from the money siphoned of by the respondent from the partnership account on 12.8.2010. (R) The said property is purchased in the name of Tapadia Constructions Limited. (S) The appellant after realising the mischief, preferred the proceedings 103/2014 under Section 9 of the Arbitration and Conciliation Act, 1996 (“Act of 1996”). (T) An issue of territorial jurisdiction was raised by the respondent. (U) Learned trial Court framed issues. (V) All the issues were decided simultaneously. (W) Arbitration Proceedings are initiated by the Buldana Urban Cooperative Credit Society Limited, Aurangabad Branch, at Aurangabad, in which Kasliwal Empire is respondent No.4. (X) An award has been delivered by the Arbitrator on 9.2.2013. (Y) The definition of “Court” is found under Section 2(e) of the Act of 1996 and which reads as under:- “'Court' means the principal civil court of original jurisdiction in a district and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit, but does not include any civil court of a grave inferior to such principal civil court, or any court of small causes.” (Z) Section 9 of the Act of 1996 provides for interim measures by the Court for preservation of any property or thing which is subject matter of the dispute in arbitration or as to which any question may arise therein and issue interim injunction.
(AA) In the proceedings before the competent court, Schedule “A” indicates the property of Hingoli and which is owned by Tapadia Constructions Limited. (AB) Territorial jurisdiction for deciding the competency of the court to deal with the said case 103/2014 ought not to be restricted to the place where the property is situated, but where the partnership firm substantially runs its business, has its registered office and if the subject matter is touching the business of the partnership firm at a particular place. (AC) The trial court has committed a grave error in delivering the impugned order and concluding that the proceedings 103/2014 are not maintainable at Aurangabad court. 5. Per contra, Shri Totala, on behalf of the respondent was heard at length and his submissions can be summarised as follows:- (A) Section 37(1) of the Act of 1996 renders this petition untenable as the order passed by the trial Court is not an appellable order. (B) The Court has concluded that it has no jurisdiction to entertain the proceedings under Section 9 of the Act of 1996. (C) Clause 17 of the partnership deed permits the reference of a dispute between the parties to the Arbitrator if the said dispute touches the business of the firm or is in relation to the firm. (D) Though the appellant has raised a dispute as regards the business of the firm, Section 9 of the Act of 1996 enables only that court to entertain the dispute and protect and preserve the subject matter of the dispute or the property concerning the dispute at the place it is situated. (E) Section 2(1)(e) defines the Court to mean the principal civil court in a particular district to have jurisdiction to decide questions forming the subject matter of the arbitration. (F) The subject matter of the proceedings initiated by the appellant is the property situated at Hingoli and which is owned by M/s Tapadia Constructions Limited. (G) M/s Tapadia Constructions Limited has not been impleaded as a party respondent to the said proceedings despite it being undisputed that the property at Hingoli is purchased by M/s Tapadia Constructions Limited. (H) Even in the prayer clauses of 103/2014 no prayer has been made against M/s Tapadia Constructions Limited.
(G) M/s Tapadia Constructions Limited has not been impleaded as a party respondent to the said proceedings despite it being undisputed that the property at Hingoli is purchased by M/s Tapadia Constructions Limited. (H) Even in the prayer clauses of 103/2014 no prayer has been made against M/s Tapadia Constructions Limited. (I) The appellant is erroneously contending that only because the respondent is the Managing Director of M/s Tapadia Constructions, that he is sought to be made answerable for and on behalf of M/s Tapadia Constructions Limited without impleading it and without any prayer against it. (J) Admittedly, Schedule “A” to 103/2014 proceedings mentions the property at Hingoli. (K) Admittedly, there is a “Court” at Hingoli as understood under Section 2(1)(e) of the Act of 1996. (L) No property of Kasliwal Empire, which is the firm of the appellant and the respondent is mentioned in Schedule “A” before the trial Court. (M) No evidence has been brought on record to prove that the property at Hingoli is purchased by the respondent from the funds of M/s Kasliwal Empire. (N) In proceedings 414/2013 between the same parties and in relation to the same partnership firm Kasliwal Empire, Schedule “A” contains the property at Aurangabad and therefore, the said proceeding 414 of 2013 is maintainable at Aurangabad. (O) The appellant has not impleaded M/s Kasliwal Empire as a respondent in the instant proceeding. (P) The appellant and the respondent cannot claim existence as legal entity in their individual name without impleading the partnership firm. (Q) No Bank Account has been opened by the partners in the name of the partnership firm. (R) The account mentioned by the appellant is a joint account in the names of the appellant and the respondent and is not an account in the name of M/s Kasliwal Empire. (S) The Hingoli property has been purchased on 12.8.2010, whereas, proceedings 103/2014 have been instituted on 24.3.2014 after about three years and four months. (T) There are no pleadings about the maintainability of 103/2014. (U) There is no whisper about the property at Hingoli in 103/2014. (V) Section 19 pertain to the Arbitral Tribunal and is not relevant in the instant case.
(T) There are no pleadings about the maintainability of 103/2014. (U) There is no whisper about the property at Hingoli in 103/2014. (V) Section 19 pertain to the Arbitral Tribunal and is not relevant in the instant case. (W) In its reply for opposing 103/2014, the respondent has specifically set out its pleadings in paragraph No.1 as under:- “That, at the outset the petition filed under Section 9 of the Arbitration Act is not tenable in the eye of law and the property referred in the petition of the district Hingoli and therefore, on territorial jurisdiction the petition is not tenable.” (X) In paragraph No.4 of the reply, it is clearly stated as under:- “That, the property involved by the petitioner belongs to a public limited company, registered under the provisions of the Indian Companies Act i.e. M/s Tapadia Construction Limited and there is no agreement of the Tapadia Construction Limited with the petitioner or respondent or with M/s Kasliwal Empire and therefore, involving property of public limited company by misleading in the Court by the petitioner is nothing but abuse of process of law.” (Y) The appellant, now, cannot pray for a remand only because 103/2014 has been dismissed and on the ground that the trial Court ought to have allowed the recording of evidence to prove issue No.1. (Z) The appellant never prayed for leading any evidence, nor did it pray for deciding issue No.1 as a preliminary issue. (AA) The appellant did not show any desire to lead evidence in the said matter and only because 103/2014 is now rejected, that the appellant is crying foul that it did not get an opportunity to lead evidence. (AB) No evidence in this matter is required since the property sought to be protected / preserved under Section 9 of the Act of 1996 is admittedly situated at Hingoli and is admittedly owned by M/s Tapadia Constructions Limited. (AC) When the company – M/s Tapadia Constructions Limited is not a party to the proceedings, its properties cannot be subjected to legal proceedings and more so under Section 9 of the Act of 1996 without hearing the company, which has legal existence. (AD) The respondent is impleaded in these proceedings in his individual capacity and on account of being the partner of the appellant in M/s Kasliwal Empire.
(AD) The respondent is impleaded in these proceedings in his individual capacity and on account of being the partner of the appellant in M/s Kasliwal Empire. (AE) The observations in the impugned order from paragraph No.13 onwards clearly exposes the case of the appellant. (AF) When the trial Court has concluded that it has no jurisdiction to entertain this case, it should not have granted any interim relief to the appellant by way of protection as is granted in this case. 6. Written Notes of Arguments have been filed on 8.5.2014 at the end of the first session by the appellant. Though the respondent vehemently opposed the filing of the Written Notes of Arguments, it has reiterated its oral submissions as being an answer to the Written Notes of Arguments submitted by the appellant. 7. Both the learned Advocates have relied upon a list of reported and unreported judgments. 8. Both the learned Advocates while opening the matter, have clearly stated that they would be addressing the Court only on the point of territorial jurisdiction and as to whether it could be said that the trial Court had committed an error in concluding that the proceedings were untenable before it at Aurangabad. In this backdrop, I would be adverting to only those citations placed on record by the respective sides, which, in my view, would have a bearing on this case. 9. The prayer clauses set out in the appeal are as under:- “(A) Appeal be allowed. (B) The order passed by the learned Principal District Judge, Aurangabad in MARJI No.103/2014 on 17.4.2014, be quashed and set aside and the application for interim measures, filed under Section 9 of the Arbitration and Conciliation Act, 1996, be allowed in terms of prayers made therein. (C) Pending hearing and disposal of the present appeal, the respondents and the company of which he is the Managing Director / Director be clamped with an injunction, restraining him from transferring, alienating and creating third party interest over the property purchased at Hingoli and under registered sale deed No. 4912 – 2013 dated 30.12.2013. (D) The respondent and the company of which he is the Managing Director / Director, be restrained from selling the property purchased at Hingoli under registered sale deed No. 4912 – 2013 dated 30.12.2013, till the mortgage debt created over the property of M/s Kasliwal Empire is redeemed by the respondent.
(D) The respondent and the company of which he is the Managing Director / Director, be restrained from selling the property purchased at Hingoli under registered sale deed No. 4912 – 2013 dated 30.12.2013, till the mortgage debt created over the property of M/s Kasliwal Empire is redeemed by the respondent. (E) Any other equitable relief, to which the appellants are found to be entitled in the circumstances of the case, be granted and oblige.” 10. The appellant has placed reliance upon the judgment of the Full Bench of this Court in the case of M/s Fountain Head Developers Vs. Mrs. Maria Arcangela Sequeira (since deceased, through L.Rs.) [2007 (3) All MR 304]. The question posed before the Full Bench was, “Whether it is the Civil Judge (Senior Division) or the District Court, which should be construed as being the Principal Court of Original Jurisdiction for the purpose of a petition under Section 34 of the Arbitration and Conciliation Act, 1996?” 11. The issue before the Full Bench was quite different than the issue before this Court. The objection raised by the respondent is primarily that the property at Hingoli is the subject matter of the proceedings. The owner and title holder of the Hingoli property M/s Tapadia Constructions Limited has not been impleaded as a respondent and no orders could be passed in relation to the property of an independent legal entity without it being heard. 12. I do not find any pleadings in this appeal, filed by the appellant, contending that M/s Tapadia Constructions Limited be allowed to be added as a respondent nor are any prayers in this petition directed against M/s Tapadia Constructions Limited. Whereas, in fact, a prayer is made against the respondent who has been impleaded in his individual capacity and not as the Managing Director of M/s Tapadia Constructions Limited, to the extent that he as the Managing Director be restrained and injuncted from transferring, alienating and creating a third party interest over the property purchased at Hingoli. In fact, the appellant has not even mentioned the name of M/s Tapadia Constructions Limited in the prayer clause. 13. I am, therefore, unable to accept that prohibitory or injunctory orders can be passed against a company and its property without it being impleaded as a respondent and without hearing it.
In fact, the appellant has not even mentioned the name of M/s Tapadia Constructions Limited in the prayer clause. 13. I am, therefore, unable to accept that prohibitory or injunctory orders can be passed against a company and its property without it being impleaded as a respondent and without hearing it. Merely because the respondent is a partner of M/s Kasliwal Empire, a partnership firm, would not by inference or assumption mean that he represents M/s Tapadia Constructions company. 14. In the case of Fountain Head (supra) the Full Bench has observed in paragraph No.9 as under:- “9. It is against this backdrop, we now proceed to consider the definition of "Court" in the Act of 1996. The intendment of the Parliament is clearly reflected in the language employed in defining the term "Court" under Section 2(e) of the Act of 1996. The Parliament intended to have only one Court as the forum for arbitral proceedings, that is, the "principal court of original jurisdiction" in a district. In this group of matters we are not concerned with inclusive definition as occurring in Section 2(e) of the Act of 1996 relating to the jurisdiction of the High Court also being the court of ordinary original civil jurisdiction. The principal court of original jurisdiction in a district does not include any civil court to a grade inferior to such principal civil court or any court of Small Causes. In other words, it categorically excludes civil courts of "a grade inferior to such principal civil court". The Parliament has, clearly, narrowed down the definition of the term "Court". The only condition contemplated in the definition of "Court" is that it should have jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject matter of a suit. In our opinion, the definition of "Court" in the Act of 1996, does not contemplate that such court should have jurisdiction over the subject matter of the dispute. What it means is the jurisdiction to decide "the question forming the subject matter of the arbitration" if the same had been the subject-matter of a suit. The pecuniary jurisdiction of a court, therefore, has no significance for the purposes of the Act of 1996. The Court, however, must have a territorial jurisdiction.
What it means is the jurisdiction to decide "the question forming the subject matter of the arbitration" if the same had been the subject-matter of a suit. The pecuniary jurisdiction of a court, therefore, has no significance for the purposes of the Act of 1996. The Court, however, must have a territorial jurisdiction. The expression "subject matter of the arbitration", therefore, cannot be read to mean a court where the suit can be filed in respect of that cause of action and would, therefore, cover all the provisions from Sections 16 to 20 of the Code of Civil Procedure. In other words, the pecuniary jurisdiction is no longer a material for deciding the jurisdiction of a court being the principal court of original jurisdiction for the purpose of a petition under Section 34 of the Arbitration and Conciliation Act.” (emphasis supplied). 15. The appellant has relied upon the judgment of Hindustan Petroleum Corporation Limited Vs. Barun Sankar Chatterjee and another [AIR 2012 Cal.255]. The issue in the said judgment was in relation to the jurisdiction of a Court under Section 42 and future applications to be filed only in a Court where the first application in respect of the Arbitral Dispute was filed. Placing reliance on this judgment, contention of the appellant is that since the respondents has preferred 414/2013 at Aurangabad, all further applications between the said parties should be filed before the same Court. 16. In my view, the said ratio is not applicable to the case of the petitioner in view of distinguishable facts. In 414/2013 between the same parties, the dispute was in relation to the protection of a property which belonged to the same partnership firm M/s Kasliwal Empire. The issue of creating an embargo / injunction on a property belonging to a different firm / company without impleading it as a respondent was not the issue before the Calcutta High Court. 17. Few more judgments filed by the appellant are also under Section 42 of the Act of 1996. 18. The appellant has relied upon the judgment of this Court dated 21.11.2013 in Civil Revision Application No.140 of 2013, in the matter of the appellant and respondent herein and three others. Again on distinguishable facts, the conclusions drawn by the said Court of referring the parties to an Arbitral Tribunal would not be applicable to this case. 19.
18. The appellant has relied upon the judgment of this Court dated 21.11.2013 in Civil Revision Application No.140 of 2013, in the matter of the appellant and respondent herein and three others. Again on distinguishable facts, the conclusions drawn by the said Court of referring the parties to an Arbitral Tribunal would not be applicable to this case. 19. The appellant has relied upon the judgment of the Full Bench of the Madhya Pradesh High Court in the matter of M/s Ram Dayal Umraomal Vs. M/s Pannalal Jagannathji [ AIR 1979 MP 153 (1)]. Issue was that, a preliminary issue in a case could be tried and disposed of as such, only if it could be so done without recording any evidence. Where an issue of jurisdiction is a mixed question of law and fact, recording of evidence of required. 20. In the instant case, neither did the appellant pray for framing of a preliminary issue nor did the parties indicate to the Court in any form that they desired to lead evidence to establish the jurisdiction of the Court. Moreover, the fact that the property situated at Hingoli belongs to M/s Tapadia Construction Limited is not disputed, inasmuch as, M/s Tapadia Construction Limited was not impleaded as a respondent, I find no merit in the contention of the appellant. 21. The appellant has also relied upon the judgments in the cases of Bank of India Vs. Abhay D. Narottam and Others [ (2005) 11 SCC 520 ], Delhi Development Authority Vs. Skipper Construction Company [ AIR 1996 SC 2005 (1)], and Badal Mittal and others Vs. Lakadawala Developers Private Limited [2013 (5) Mah. L.J. 185] which are not applicable to the present in view of the distinguishable facts. 22. The appellant has also relied upon the judgment of this Court in the case of Girish Mulchand Mehta and another Vs. Mahesh S. Mehta and another [2010 (1) All MR 719]. In paragraph No.12 of the said judgment, the learned Division Bench of this Court has held as under:- “12. The next question is whether order of formulating the interim measures can be passed by the Court in exercise of powers under Section 9 of the Act only against a party to an Arbitration Agreement or Arbitration Proceedings. As is noticed earlier, the jurisdiction under Section 9 can be invoked only by a party to the Arbitration Agreement.
The next question is whether order of formulating the interim measures can be passed by the Court in exercise of powers under Section 9 of the Act only against a party to an Arbitration Agreement or Arbitration Proceedings. As is noticed earlier, the jurisdiction under Section 9 can be invoked only by a party to the Arbitration Agreement. Section 9, however, does not limit the jurisdiction of the Court to pass order of interim measures only against party to an Arbitration Agreement or Arbitration Proceedings; whereas the Court is free to exercise same power for making appropriate order against the party to the Petition under Section 9 of the Act as any proceedings before it. The fact that the order would affect the person who is not party to the Arbitration Agreement or Arbitration Proceedings does not affect the jurisdiction of the Court under Section 9 of the Act which is intended to pass interim measures of protection or preservation of the subject matter of the Arbitration Agreement.” 23. However, it is to be noted that in the facts of the said case, the General Body of the Society, which is supreme, had taken a conscious decision to redevelop the suit building. The General Body of the Society had also resolved to appoint respondent No.1 as the Developer. Those decisions have not been challenged at all. The appellants, who were Members of the Society at the relevant time, were bound by the said decision. It is in these circumstances, that the learned Division Bench held that merely because the terms and conditions of the Development Agreement are not acceptable to the appellants, who are in minuscule minority, they cannot refuse to abide by the decision of the General Body. 24. It was in this context, that the learned Division Bench concluded in paragraph No.16 as under:- “16. In the present case, it is not in dispute that the General Body of the Society which is supreme, has taken a conscious decision to redevelop the suit building. The General Body of the Society has also resolved to appoint the Respondent No.1 as the Developer. Those decisions have not been challenged at all. The Appellants who were members of the Society at the relevant time, are bound by the said decisions.
The General Body of the Society has also resolved to appoint the Respondent No.1 as the Developer. Those decisions have not been challenged at all. The Appellants who were members of the Society at the relevant time, are bound by the said decisions. The Appellants in the dispute filed before the Cooperative Court have only challenged the Resolution dated 27/4/2008, which challenge would merely revolve around the terms and conditions of the Development Agreement. As a matter of fact, the General Body of the Society has approved the terms and conditions of the Development Agreement by overwhelming majority. Merely because the terms and conditions of the Development Agreement are not acceptable to the Appellants, who are in minuscule minority (only two out of twelve members), cannot be the basis not to abide by the decision of the overwhelming majority of the General Body of the Society. By now it is well established position that once a person becomes a member of the Cooperative Society, he looses his individuality with the Society and he has no independent rights except those given to him by the statute and Bye-laws. The member has to speak through the Society or rather the Society alone can act and speaks for him qua the rights and duties of the Society as a body (see Daman Singh & ors. v/s. State of Punjab reported in AIR 1985 SC 973 ). This view has been followed in the subsequent decision of the Apex Court in the case of State of U.P. v/s. Chheoki Employees Cooperative Society Ltd. reported in AIR 1997 SC 1413 . In this decision the Apex Court further observed that the member of Society has no independent right qua the Society and it is the Society that is entitled to represent as the corporate aggregate. The Court also observed that the stream cannot rise higher than the source. Suffice it to observe that so long as the Resolutions passed by the General Body of the Respondent No. 2 Society are in force and not overturned by a forum of competent jurisdiction, the said decisions would bind the Appellants. They cannot take a stand alone position but are bound by the majority decision of the General Body.
Suffice it to observe that so long as the Resolutions passed by the General Body of the Respondent No. 2 Society are in force and not overturned by a forum of competent jurisdiction, the said decisions would bind the Appellants. They cannot take a stand alone position but are bound by the majority decision of the General Body. Notably, the Appellants have not challenged the Resolutions passed by the General Body of the Society to redevelop the property and more so, to appoint the Respondent No.1 as the Developer to give him all the redevelopment rights. The propriety rights of the Appellants herein in the portion (in respective flats) of the property of the Society cannot defeat the rights accrued to the Developer and/or absolve the Society of its obligations in relation to the subject matter of the Arbitration Agreement. The fact that the relief prayed by the Respondent No. 1 in Section-9 Petition and as granted by the Learned Single Judge would affect the propriety rights of the Appellants does not take the matter any further. For, the propriety rights of the Appellants in the flats in their possession would be subservient to the authority of the General Body of the Society. More so, such rights cannot be invoked against the Developer (Respondent No.1) and in any case, cannot extricate the Society of its obligations under the Development Agreement. Since the relief prayed by the Respondent No.1 would affect the Appellants, they were impleaded as party to the proceedings under Section 9 of the Act, which was also necessitated by virtue of Rule 803E of the Bombay High Court (Original Side) Rules. The said Rule reads thus:- "R.803-E. Notice of Filling Application to persons likely to be affected. – Upon any application by petition under the Act, the Judge in chambers shall, if he accepts the petition, direct notice thereof to be given to all persons mentioned in the petition and to such other persons as may seem to him to be likely to be affected by the proceedings, requiring all or any of such persons to show cause, within the time specified in the notice, why the relief sought in the petition should not be granted." As such the ratio laid down in the said judgment would not assist the appellant. 25.
25. The respondent has relied upon the judgment of the learned Division Bench of the Calcutta High Court in the matter of Ambika Enterprises Vs. Trishna Bose and another [ 2003 (3) ARBLR 9 (CAL)]. The issue was with regard to an application under Section 9 having been dismissed for non prosecution and its revival having been sought by filing an application under Section 151 of the Civil Procedure Code, 1908. The said application was rejected. The appeal filed by the appellant was also dismissed by the learned Division Bench of the Calcutta High Court. The facts of the case being distinguishable, the ratio laid down therein does not apply to this case. 26. The respondent has relied upon the judgment of the Madras High Court in the case of Suguna Poultry Farm Limited and others Vs. Arun Mariamman Textiles Limited and others, [AIR 2005 Madras 72]. The parties were before the Subordinate Judge, Pollachi. Injunctory orders were sought. A particular party against whom the order of injunction was applicable had not been impleaded in the proceedings. It was also claimed that the Court had no jurisdiction. It was observed by the Madras High Court in paragraph No.20 that the entire conduct of the plaintiff brought to surface his evil idea, to obtain an order behind the back of the parties, who are interested in the property and such a person need not be shown any leniency. 27. I have gone through the impugned order. It was noted by the trial Court that the jurisdiction of the partnership deed between the appellant and the respondent was restricted to development of the housing project at Satara village Aurangabad. The said object has been clearly set out in Clause 4 of the partnership agreement. It was also noted that there was no bank account opened in the name of the partnership firm. It appeared that the Savings Account No.23/3858 was a joint account of the appellant and the respondent. 28. It is an admitted position before this Court that there was no partnership firm account in the name of M/s Kasliwal Empire. Contention of the appellant is that the property at Hingoli was purchased by M/s Tapadia Constructions Limited from the amount withdrawn from the joint account by the respondent and deposited in the SBI account held in the name of M/s Tapadia Constructions.
Contention of the appellant is that the property at Hingoli was purchased by M/s Tapadia Constructions Limited from the amount withdrawn from the joint account by the respondent and deposited in the SBI account held in the name of M/s Tapadia Constructions. When this was firmly contended by the appellant, it is unknown as to why M/s Tapadia Constructions Limited was kept away from the proceedings 103/2014. 29. The trial Court in the impugned judgment has noted that the area of operation of the partnership firm M/s Kasliwal Empire was only to the extent of developing the housing property at village Satara, district Aurangabad. The fact that the respondent was the Managing Director / Director of Tapadia Constructions Limited, was not held to be sufficient so as to seek reliefs against the respondent by impleading him in his personal capacity and seeking orders against the registered company M/s Tapadia Constructions Limited. 30. The trial Court has considered the definition of “Court” under Section 2(e) of the Act of 1996. It has also considered the ratio laid down in the reported judgments as follows:- (i) M/s Jyothi Turbo Power Services Private Limited Vs. M/s Shenzhen Shandong Neuclear Power Construction Company Limited [AIR 2011 AP 111], (ii) Globe Cogeneration Power Limited Vs. Sri Hiranyakeshi Sahalkari Sakkere Karkhane Niyamit, Sankeshwar, Karnataka [AIR 2005 KANT 94] and (iii) DTM Construction Vs. P K Srinivas [AIR 2011 Orissa 51]. 31. The trial Court has, therefore, considered the fact that the property which is sought to be subjected to preservation and protection by interim measures, which is of the nature of injuncting the company, namely, M/s Tapadia Constructions Limited was situated at Hingoli and, therefore, beyond its jurisdiction. I find no error in such a conclusion. 32. Though it is strenuously contended by the learned Sr. Advocate for the appellant that Clause 17 of the partnership deed would enable the Court at Aurangabad to entertain the said case because the dispute has arisen between the parties touching the business of the firm or relating to the firm, I am unable to accept the said contention for reasons more than one. Firstly, the property sought to be brought under the purview of Section 9 of the Act of 1996 admittedly belongs to an independent legal entity, which has not been impleaded as a party respondent.
Firstly, the property sought to be brought under the purview of Section 9 of the Act of 1996 admittedly belongs to an independent legal entity, which has not been impleaded as a party respondent. Secondly, an embargo is sought to be created on the property at Hingoli to which the respondent herein does not have an exclusive title or ownership in his individual capacity. Thirdly, the learned District Judge, Osmanabad would not be precluded or handicapped from looking into this issue and, therefore, it cannot be construed that the Court at Aurangabad alone could deal with the dispute between the litigating parties. 33. I have no difficulty in accepting one contention of the appellant that the dispute between the parties is in relation to the business of the firm M/s Kasliwal Empire. However, that cannot be enlarged to include within its fold a property belonging to an independent legal entity and which is situated at Hingoli, beyond the scope and object of the partnership deed and also for the reason that the title holder of the property M/s Tapadia Constructions Limited has not been impleaded as a respondent. 34. So far as the contention of the respondent is concerned that this appeal is not tenable under Section 37(1)(a) of the Act of 1996, in my view, the same amounts to a misconception. Section 37(1)(a) under Chapter IX – APPEALS in the Act of 1996 reads as under:- “37. Appellable Orders – (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely;- (a) Granting or refusing to grant any measure under Section 9.” 35. In my view, the impugned order by which the proceedings are held not maintainable on account of territorial jurisdiction, would amount to refusal by the Court to grant any measure under Section 9. I, therefore, reject this contention of the respondent. 36. In the light of the above, I conclude that the appeal filed by the appellant is maintainable under Section 37(1)(a) of the Act of 1996. 37. In the light of the above, I do not find any error or perversity in the impugned order dated 17.4.2014 in Arbitration Application (MARJI) No.103 of 2014. The appeal is without any merits. The appeal, therefore, is dismissed. No order as to costs. .... 38.
37. In the light of the above, I do not find any error or perversity in the impugned order dated 17.4.2014 in Arbitration Application (MARJI) No.103 of 2014. The appeal is without any merits. The appeal, therefore, is dismissed. No order as to costs. .... 38. After the pronouncement of this judgment, Shri Adwant, learned Advocate for the appellant has submitted that the appellant desires to question this judgment before the Honourable Supreme Court. He, therefore, submits that since the appellant has been protected, initially by the orders of the learned Principal District Judge and subsequently by the orders of this Court, the said protection be extended for the period of six weeks. 39. Shri Totala, learned Advocate for the respondent submits that since the lower Court as well as this Court have concluded that on account of lack of territorial jurisdiction, the application filed by the appellant was untenable, any relief granted after drawing this conclusion would tantamount to passing an order without jurisdiction. He has, therefore, vehemently opposed the said request. 40. The appellant has been protected by the learned Principal District Judge, Aurangabad after passing the impugned order dated 17.4.2014, inasmuch as this Court had also granted protection to the appellant on 28.4.2014, which continues till this date. 41. In view of the submissions of the appellant, that the judgment of the District Court as well as this Court are to be challenged before the Honourable Supreme Court, I do not find that it would cause an irreparable harm to the respondent, if the said protection is extended for a further period of six weeks from today. 42. As such, the protection, in the nature of status quo granted earlier, is extended for the period of six weeks from today.