SHIV MOHAN MEHRA Vs. VEENA BATHIA

JUDGEMENT

(1.) Defendant No. 1 is the owner of the property known as B-36, Lajpat Nagar-II, New Delhi. The said defendant was using a part of the said property for doing business of trading in tyres. The plaintiff represented to the said defendant that he had sufficient experience in the running of restaurant and on his representation, defendant No. 1 agreed to open a restaurant in the premises on the ground floor of the said property in partnership with the plaintiff. Subsequently, defendant No. 2 was also associated with the venture and it was agreed that defendant Nos. I and 2 would jointly hold 50% share in the partnership and the other 50% will be held by the plaintiff. A formal partnership deed was, accordingly, entered into between the parties on 11th March, 1993 effective from 29th June, 1992. As per terms of the partnership deed, the parties had agreed for establishing/setting up a restaurant under the name and style of "Ala Gila" at B- 36, Lajpat Nagar-II, New Delhi. The plaintiff was to provide an investment upto a maximum of Rs. 20,00,000.00 andany further investment required for the venture was to be contributed by the defendants. The plaintiff is alleged to have invested more than his share as warranted under the terms agreed upon between the parties for making the venture operational. However, the defendants avoided to provide the finances needed for running the restaurant. It is alleged that the restaurant became operational during September, 1993 but the sales did not pick up for lack of publicity. Accounts are alleged to have been maintained by defendant No. 2 and on account of non-contribution of the defendants, the venture was not running profitably. It is alleged that with the investment made by the plaintiff, the premises acquired great value and as a result thereof, the defendants started causing obstruction in the running of the restaurant resulting in demoralising of the staff. It is also stated that by a notice dated 12th July, 1995 delivered to the plaintiff on 21 /22nd July, 1995, the defendants have sought to dissolve the firm. According to the plaintiff, the defendants could not dissolve the firm by notice as in terms of Clause 18 of the partnership deed, the firm could be dissolved only by mutual consent. Certain disputes had thus arisen between the parties and the same were liable to be referred to arbitration in terms of the arbitration clause contained in the partnership deed. The disputes have been incorporated in paragraph 8 of the petition. Alongwith the suit, an application for injunction has been filed for restraining the defendants from interfering with the plaintiff's running/managing the business under the name and style of "Ala Gila" from premises No. B-36, Lajpat Nagar-II, New Delhi.

(2.) Defendant Nos.1 and 2 have filed the written statement. Reply to the application has also been filed. The said defendants have also filed an application under Order 40 of the Code of Civil Procedure for appointment of a receiver. The defendants have denied that accounts were being maintained by any of them. It is also stated that as the business was not profitable and was running in losses and there were arrears of sales-tax as well, which had not been paid by the firm, the defendant Nos.l and 2 by a notice dated 12th July, 1995 expressed their desire not to continue as partners in the firm and dissolved the same w.e.f. 10 days after the receipt of the said notice by the plaintiff. It is submitted that the said defendants were within their rights to dissolve the firm by giving a notice and under Clause II of the partnership deed, the plaintiff did not have any right to occupy any portion of the premises or to continue with the business. There has, however, been no objection to the appointment of an Arbitrator to decide the disputes which had arisen between the parties. By application underOrder40Rule 1, defendant Nos.l and 2 seek appointment of a receiver. The submission in the application is that after the receipt of notice dated 12th July, 1995 by the plaintiff on 22nd July, 1995, the firm stood dissolved on 2nd August, 1995 i.e. 10 days after the receipt of notice by the plaintiff. It is submitted that after the dissolution of firm, the plaintiff has no right to use partnership assets for his own benefit and they apprehend that there is a danger of the plaintiff removing valuable assets of the partnership and that the accounts of the firm are also likely to be interpolated by the plaintiff. It is also stated that the plaintiff has no right to enter the premises of the restaurant because in terms of Clause 11 of the partnership deed, the same was to remain in possession of defendant No. 1 only. It is, therefore, submitted that it would be just and convenient that a receiver is appointed of the assets of the partnership-firm.

(3.) The short question involved in this case at this stage, for purposes of deciding the application of the plaintiff for aninjunction and the application of the defendant for appointment of a receiver, is whether, prima fade, the partnership was "AT WILL" or the firm could be dissolved only with the consent of the parties. To understand the contention of the parties, it will be useful to note down in details the terms and conditions of the partnership deed. The relevant terms of the partnership deed which have bearing on the case, are as under:-