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Moti Lal Vs. Badri Nath and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtJammu and Kashmir High Court
Decided On
Case NumberCivil First Misc. Appeal No. 82 of 1980
Judge
ActsJammu and Kashmir Code of Civil Procedure (CPC), 1977 - Order 40, Rule 1
AppellantMoti Lal
RespondentBadri Nath and ors.
Appellant Advocate Abdul Qayoom and; J.N. Langer, Advs.
Respondent Advocate P.N. Goja and; M.L. Misri, Advs.
DispositionAppeal allowed
Cases ReferredPrem Prakash v. Gobind Ram).
Excerpt:
- .....the sale and purchase of wines, novelties, including stationery etc. under the name and style of 'nishat wines', the funds for the business were obtained from the sale of a press known as 'nishat press' which came down into the family from their common ancestor, namely, pandit gana kaul. he and his brothers defendants nos. 1 and 2 are equal sharers in the business, each having 1/3rd share in it. defendants nos. 1 and 2 have made over the management of the business to defendant no. 3 in order to deprive the plaintiff of the benefits flowing from it. he has asserted that defendant no. 3 has no separate or exclusive interest in the said business. on the other hand, the case of the defendants is that defendant no. 3 is running the business in his own right with defendant no. 1 as his.....
Judgment:

Mufti Baha-Ud-Din Farooqi, Actg. C.J.

1. This is an appeal from the order dated 24-11-1980, of the Addl. District Judge, Srinagar, dismissing a receivership application. The plaintiff has brought a suit against the defendants for partition of immovable property and dissolution of partnership and rendition of accounts in the court of the Addl. District Judge, Srinagar. Here we are con-cerned with the partnership business only. The appellant-plaintiff moved an application before the trial court for appointment of a receiver in respect of the partnership business. The trial court dismissed the application on the ground that no receiver can be appointed whereit has the effect of dispossessing the defendants,

2. The case of the plaintiff is that the parties are the members of joint Hindu undivided family. They are carrying on business for the sale and purchase of wines, novelties, including stationery etc. under the name and style of 'Nishat Wines', The funds for the business were obtained from the sale of a press known as 'Nishat Press' which came down into the family from their common ancestor, namely, Pandit Gana Kaul. He and his brothers defendants Nos. 1 and 2 are equal sharers in the business, each having 1/3rd share in it. Defendants Nos. 1 and 2 have made over the management of the business to defendant No. 3 in order to deprive the plaintiff of the benefits flowing from it. He has asserted that defendant No. 3 has no separate or exclusive interest in the said business. On the other hand, the case of the defendants is that defendant No. 3 is running the business in his own right with defendant No. 1 as his partner, The plaintiff has nothing to do with it. He has no right or interest in it. They have denied that Pt, Gana Kaul, the common ancestor, owned any press or that one came down into the family. They have pleaded that 'Nishat Wines' is an exclusive, totally independent and separate concern of defendant No. 3 except that defendant No. 1 is his partner on commission basis.

3. There is no dispute that the plaintiff and defendants Nos. 1 and 2 are real brothers. They are the sons of Pt. Gana Kaul. The father and the sons constituted a joint Hindu family. There is material on the file to show that Pt. Gana Kaulowned a press known as 'Nishat Electric Press'. There is also material on the file to show that after the death of Pt. Gana Kaul his son, Badri Nath Kaul, defendant No. 1 moved an application for substitution of his name in the declaration form pertaining to the press in place of his deceased father. Thus there is prima facie evidence to show that Pt Gana Kaul owned a press which came down into the family after his death. There is, however, no prima facie evidence to show that defendant No. 3 was having any separate funds. In the circumstances the plaintiff's contention that the defendants have started the business under the name and style of 'Nishat Wines' from out of the sale proceeds of 'Nishat Electric Press', which was a joint family property; and that he has a share in it, cannot be dismissed as untenable.

4. The law is well established that where there is a prima facie existence of partnership and the plaintiff is denied his right to manage the affairs of partnership and to have access to the account thereof, the appointment of a receiver would be justified. (See AIR 1976 J & K 37, Prem Prakash v. Gobind Ram).

5. On the facts stated above, it is prima facie proved that 'Nishat Wines' is a joint Hindu family concern of which the plaintiff is a sharer. It is also prima facie proved that the plaintiff has been denied access to the management and accounts of the business. Applying the test mentioned above, this is a fit case, in which the appointment of a receiver should be ordered. The view to the contrary expressed by the Addl. District Judge is wholly erroneous. He has approached the case as if it was a case for the appointment of a receiver in respect of immovable property. For, it is in such a case that question of possession would be a relevant consideration.

6. The question, however, arises as to who should be appointed as the receiver and with what powers and functions. Here one cannot lose sight of the fact that the business includes the sale and purchase of wines which is done under a licence. The licence is admittedly in the name of defendant No. 3. That nature of the business is such that the licencee has to file returns and has to discharge various obligations imposed by the Excise Act. Consequently, if a stranger is let in, he will create a mess with the result that the business itself might collapse. In the circumstances, it wouldbe just and proper to keep the present management intact. The management should, however, be required to maintain proper accounts of the assets of the business both capital and liquid including the income accruing from it and submit monthly returns to the trial court till the suit is finally decided. They shall also be required not to draw any money from the business income for personal use in excess of Rs. 1,000 (rupees one thousand) per month without the previous permission of the trial court. Lest the defendants should cook up the accounts or misuse the business, it will be proper if the plaintiff or his nominee is associated with the licencee (defendant No. 3) and the accounts of the business are required to be maintained under the joint signatures of the licencee and the plaintiff, or his nominee as the case may be. The plaintiff or his nominee shall in addition, be authorised to keep watch over the accounts generally. The plaintiff, unless he wants to associate himself with the licencee, shall give the name of the nominee within a week. The defendants shall associate the plaintiff or his nominee with themselves to discharge the functions as mentioned above. The nominee's remuneration, if the plaintiff decides to have one, shall be borne by him. The appeal is disposed of on these terms. The parties are directed to appear in the trial court on 1st of October, 1981.


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