PREMWATI Vs. BHAGWATI DEVI

JUDGEMENT

(1.) BANWARI Lal, common ancestor of the plaintiff and defendant Nos. 1 to 6 constituted proprietorship concern under the name and style of M/s. Bhana Mal Gulzari Mal, Chawri Bazar. Later Banwari Lal with his son Bal Kishan Das incorporated six private limited companies registered under the Companies Act, 1956 which took over the entire capital, assets and liabilities of M/s. Bhana Mal Gulzari Mal, the sole proprietorship concern. The plaintiffs in the suit are Smt. Premwati, daughter of Bal Kishan Das and legal heirs of his son Gopal Kishan Das who died in 1984. The defendant No. 1 is the wife and defendant Nos. 2 to 6 the other legal heirs of Bal Kishan Das. The six companies incorporated by Banwari Lal and his son Bal Kishan Dass from the capital and assets of M/s. Bhana Mal Gulzari Mal have been impleaded as defendant Nos. 7 to 12 in the suit. It is the case of the plaintiffs that defendant Nos. 2 to 6 were controlling defendant Nos. 7 to 12. The pedigree chart of Banwari Lal is as under:

(2.) A suit for partition and rendition of accounts was filed by the plaintiffs being CS(OS) No. 305 of 1996 on the premise that in the six companies, that is, defendant Nos. 7 to 12 the capital assets and profit of the sole proprietorship concern of Banwari Lal, the legal ascendant of the plaintiffs and the defendants, were utilised and the defendant Nos. 1 to 6 were inter alia not filing the income tax return and wealth tax return or calling for annual general meeting of the companies, misappropriating all the funds, not paying ECI, wealth tax and had entered into agreements with builders for various properties and misusing the properties of the companies for their personal gains. Details of properties in the name of six companies being misused were also given. Further partition of various immovable properties was also sought.

(3.) DURING the course of proceedings the plaintiff No. 1, defendant No. 1 and some of the other defendants passed away and thus the proceedings for substitution of legal heirs continued. On November 14, 2002 the learned Single Judge settled the following issue as preliminary issue and noted that if this issue is decided against the plaintiff and in favour of the defendants, nothing would survive in the suit: