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Delhi High Court · body

2017 DIGILAW 4548 (DEL)

Krypton Heights Builders v. Aercomfort Anushka J. V.

2017-11-23

VALMIKI J.MEHTA

body2017
JUDGMENT : Valmiki J. Mehta, J. IA No.10031/2017(u/O VII R-11 CPC by defendants No.1, 2, 4, 6 & 7) 1. This is an application filed by defendants No.1, 2, 4, 6 and 7 under Order VII Rule 11 CPC for rejection of the plaint or dismissal of the suit. During the course of arguments this application is pressed for dismissing of the suit against defendants nos. 5 and 6 on the ground that these defendant nos. 5 and 6 are not the partners of the defendant no.1 partnership firm. It is however conceded that defendant nos. 4 and 7 in fact became partners of the defendant no.1 partnership firm in terms of the business takeover agreement dated 1.3.2014 and as per which agreement the defendant nos. 4 and 7 have also agreed to be personally liable for the liabilities of the defendant no.1 existing on the date of entering into this agreement. 2. A reading of the plaint shows that this suit is filed for recovery of Rs.3,17,10,185/- on the ground that defendant no.1 was given a contract of air conditioning of a railway project in Delhi and part of which project was as per the plaint sub-contracted to the plaintiff. In the plaint it is pleaded that the plaintiff did the work and for such work done the plaintiff is entitled to the suit amount which remains unpaid on account of work having being done by the plaintiff for the defendant no.1. 3. A reading of the plaint shows that the defendant no.5 is pleaded to be a director of a company M/s. Anushka Air Conditioning Pvt. Ltd. i.e. the defendant no.3 company. Surely, when a company is a partner in a partnership/in a joint venture agreement then the liability of a partner will be that only of the partner M/s. Anushka Air Conditioning Pvt. Ltd. Rights and liabilities of the partner M/s. Anushka Air Conditioning Pvt. Ltd. in the defendant no.1 is completely separate in law and cannot be the liability of its shareholders or directors because a company is a separate legal entity than its directors and shareholders. Therefore, since defendant no.5 is only sued on account of this defendant being a signatory to the cheques issued in favour of the plaintiff which were dishonoured, and which cheques were signed by defendant no.5 only as a director of defendant no.3 company who is a partner in the defendant no.1 partnership firm, accordingly in law there is no cause of action against or liability of the defendant no.5 who is only a director of one partner company, that is the defendant no. 3 company M/s. Anushka Air Conditioning Pvt. Ltd. Suit against defendant no.5 therefore as per the admitted contents of the plaint does not layout a legal liability of the defendant no.5 and therefore suit as against defendant no.5 will stand dismissed by deleting defendant no.5 under Order I Rule 10 CPC read with Order VII Rule 11 CPC. 4. So far as, defendant no.6 in the suit is concerned it is seen that the same is a company M/s. Aeon Air Conditioning Pvt. Ltd. This defendant no.6 company is said to have purchased shareholding in one of the partner company namely defendant no.3/M/s. Anushka Air Conditioning Pvt. Ltd. Therefore defendant no.6 is only a shareholder of the partner company/the defendant No.3. As already stated above, liability of a shareholder of company which is a partnership firm cannot be the liability of the company and vice versa. Therefore merely on account of defendant no.6 company being a shareholder of defendant no.3 company, and which defendant no.3 company is a partner in the partnership firm of defendant no.1 firm, hence there cannot be a personal liability of the defendant no.6 company towards the plaintiff. Accordingly, there is no cause of action which is pleaded to be found as required by law for liability of the defendant no.6 company to arise in favour of the plaintiff. Once there is no legal cause of action pleaded in the plaint as against the defendant no.6 company, the suit against the defendant no.6 company is liable to be dismissed and accordingly defendant no.6 is deleted from the array of parties by an application of Order I Rule 10 CPC read with Order VII Rule 11 CPC. 5. This application is therefore allowed to the limited extent of deleting defendant nos.5 and 6 from the array of defendants in the suit. 5. This application is therefore allowed to the limited extent of deleting defendant nos.5 and 6 from the array of defendants in the suit. Amended memo of parties be filed by the plaintiff along with necessary amendments in the plaint within a period of four weeks from today. 6. At this stage at the request made on behalf of the counsel for defendant nos.1, 2, 4 and 7, it is noted that this application is disposed of as not pressed as regards other averments made in the same and if there is an entitlement of the defendant nos.1, 2 to 4 and 7 to seek dismissal of the suit under Order XII Rule 6 CPC then liberty is granted to file such application of course if the ingredients of Order XII Rule 6 CPC are satisfied and so averred in the application under Order XII Rule 6 CPC which is proposed to be filed by these defendants. 7. IA is accordingly disposed of.