Gajanan S. Sawant vs Smt. Suhasini R. Sawant

F.M. Reis, J.—Heard Shri C. Mascarenhas, learned Counsel appearing for the appellant and Shri A. Nachinolkar, learned Counsel appearing for the respondent. The above appeal challenges the judgment dated 01.09.2010 passed by the learned District Judge, North Goa, Panaji, in Civil Misc. Application No. 189/2009 whereby an application filed by the appellant u/s 9 of the Arbitration and Conciliation Act, 1996 came to be dismissed.

The admitted facts of the case are that the appellant was carrying on the business in partnership firm under the name and style of M/s R.S. Sawant and Brothers along with his late brother in terms of the Deed of Partnership dated 12.08.1985 and the subsequent Deed dated 1.6.1992, the partnership was at will. The respondent was inducted in the partnership in terms of the Deed dated 30.08.1996 upon the death of the brother and the business continued thereafter. It is the contention of the appellant that the disputes and differences arose between the parties in the year 2003 when it was decided to put an end to the business and settle the accounts amicably. The draft agreement was prepared for the purpose of distributing the assets of the partnership which was dated 21.12.2003 but however there was a dispute with regard to said agreement as it is contended by the respondent that there were minutes signed between the parties which resulted in an agreement between the parties on 21.12.2003. The respondent thereafter initiated a suit before the learned Judge for the dissolution of the partnership and partnership assets and for accounts. But however, in view of the application filed by the appellant herein u/s 8 of the Arbitration and Conciliation Act, 1996, the matter was directed to be referred to Arbitration by order dated 18.10.2007. Accordingly, it is not in dispute that the Arbitral Proceedings with regard to the disputes between the parties are in progress and not yet disposed of. It is further the contention of the appellant that the partnership owned certain assets including the shops and flat at Vishnukamal Apartments and another flat in Chaitanya apartment apart from the basement office premises, vehicles, construction material as well as a plot no. 34 at Jayceenagar, Ponda which is the subject matter of the above appeal. It is further the case of the appellant that the Deed of Sale dated 01.06.1987 was on behalf of the partnership firm and from the funds of the partnership firm a bungalow was proposed to be constructed by the said firm in the year 2000 which thereafter came to be abandoned in the year 2003. It is further the case of the appellant that on 03.12.2009 the appellant learnt that the respondent had restarted the work of the proposed bungalow and upon inspection, it reveals that she was engaged in completing the ground floor. The appellant raised an objection to such activity on the part of the respondent but however she refused to accede to the request of the appellant to stop such activity and proceeded with such construction activity. The construction licence was issued on 28.09.2000 and the same had expired on 27.09.2001. It is further admitted that the licence was obtained in the name of the respondent but however according to the appellant it was only for the sake of convenience. It is further the case of the appellant that the disputed plot is a partnership asset and the respondent has no right to interfere in any manner after the dissolution of the partnership on 08.09.2003. Consequently, an application came to be filed u/s 9 of the Arbitration and Conciliation Act, 1996 for an order of injunction restraining the respondent from carrying out any construction work in the disputed plot and taking the possession of the disputed plot.

The respondent disputed the claim filed by the appellant and pointed out that the Arbitration proceedings were in progress and the Arbitral Tribunal was ceased of the dispute between them. It is further the case of the respondent that the application filed by the appellant was an abuse of the process of law. It is further the contention of the respondent that the partnership came to an end upon the death of her husband and a fresh partnership deed was entered on 30.08.1996 to continue with the business of the said partnership. It is further her case that the accounts of the firm were never disclosed to her and when she questioned the appellant to that effect he decided to dissolve the partnership and issued a letter dated 08.09.2003 to put an end to the partnership. It is further her case that the accounts were amicably settled and the minutes were drawn on 21.12.2003 wherein it was agreed to allot certain premises including the disputed plot no. 34 with its incomplete construction therein to the respondent. It is further her case that the appellant had not disclosed all the assets to her in the said minutes but has agreed to keep the remaining assets and liabilities and the goodwill of the firm with himself. It is the contention of the appellant that she was given possession of the assets allotted to her, except the Maruti car and an amount of Rs. 1,40,000/- as per the minutes of the meeting held on 21.12.2003. A draft agreement was prepared on 24.12.2003 and sent to the appellant who was also called upon to hand over the title documents of the assets allotted to her. But however the appellant has failed to accede to the said request. It is further her case that the appellant was deliberately concealing the assets of the partnership from the respondent. It is further her case that it was agreed that the bungalow constructed in the plot at Khadpaband would be allotted to the appellant while she was allotted the disputed plot no. 34. It is further her case that the appellant continued to construct a bungalow in his plot at Khadpaband and abandoned the construction of the bungalow in the disputed plot. As such, it is the contention of the respondent that she is entitled to carry out the construction work in the said plot and consequently the appeal deserves to be rejected.

The learned Judge by the impugned judgment dated 01.09.2010 dismissed the application filed by the appellant. The learned Judge after considering the judgments relied upon by the learned Counsel appearing for the respective parties came to the conclusion that the Deed of Partnership dated 01.06.1992 between the appellant and the late husband of the respondent was at will and that the respondent had joined as a partner in the business on 30.8.1996. The learned Judge further found that there were minutes of meeting which were duly signed by the parties and that the draft agreement would have to be considered in the context of such minutes of the meeting. The learned Judge has further found that the appellant had admittedly written to the respondent on 19.11.2007 by which he had admitted the meeting on 21.12.2003 in their office for the settlement about the dissolution of the firm and that the minutes were drawn on the said date. The learned Judge further found that in the statement of claims of the appellant the disputed plot no. 34 was claimed by the appellant as an asset of the partnership. The learned Judge also found that there were 14 claims put forward by the appellant which were not relating to the disputed plot. The learned Judge took note of the contention of the respondent that right from the time she was inducted as a partner in the firm after the death of her husband, the appellant had not given any accounts nor paid any amounts to her. The learned Judge also took note of the fact that there were attempts to settle the dispute. The learned Judge further took note of the minutes of the meeting dated 21.12.2003. The learned Judge also took note of the fact that the appellant had admitted to have tentatively divided the assets on certain conditions and that the agreement was recorded in writing. The learned Judge also took note of the letter dated 26.01.2004 wherein it is stated that there is a clear and unequivocal admission of the respondent being the exclusive owner of the disputed plot and being put in possession thereof. The learned Judge also took note of the fact that in case the construction is permitted to be carried out by the respondent, it would only enhance the value of the property and would not diminish it. The learned Judge as such rejected the application filed by the appellant for temporary measures u/s 9 of the Arbitration and Conciliation Act. Being aggrieved by the said judgment, the appellant has preferred the present appeal.

Shri C. Mascarenhas, learned Counsel appearing for the appellant has assailed the impugned judgment as according to him, the disputed plot is an asset of the partnership and as such in view of Section 53 of the Partnership Act, the respondent cannot be permitted to deal with partnership assets unless and until the dissolution has taken place. The learned Counsel has further pointed out that the original sale deed in respect of the disputed plot was in favour of the appellant and the husband of the respondent which was for the benefit of the partnership firm. The learned Counsel further pointed out that the draft agreement dated 24.12.2003 has not been duly executed by the parties and as such the question of relying upon such agreement to contend that the plot was allotted to the respondent is totally misplaced. The learned Counsel has further pointed out that considering that the affairs of the partnership have not been wound up, it is not permissible for the respondent to change the status quo at the site and carry out construction activity therein. The learned Counsel further pointed out that considering that the respondent is not entitled to be the exclusive owner of the disputed plot, the question of permitting the respondent to carry out construction activity does not arise. The learned Counsel has further pointed out that allowing such activity would result in an irreparable damage to the right of the appellant in the proceedings before the Arbitrator. The learned Counsel has taken me through the impugned judgment as well as the material on record and pointed out that the learned Judge has misconstrued the evidence on record and has erroneously dismissed the application filed by the appellant u/s 9 of the Arbitration and Conciliation Act, 1996.

On the other hand, Shri A. Nachinolkar, learned Counsel appearing for the respondent has supported the impugned judgment. The learned Counsel has further pointed out that the appellant has failed to disclose the fact that at the time when the dispute between the partners was tried to be amicably settled, the minutes were duly signed by the parties which according to the learned Counsel has resulted in a concluded contract. The learned Counsel thereafter pointed out a letter dated 26.3.2004, wherein the appellant has in fact confirmed that pursuant to the said agreement, some of the assets including the disputed plot was handed over to the respondent herein. The learned Counsel has further pointed out that the licence with regard to the construction being put up in the suit plot was always in the name of the respondent which itself discloses that the said plot was to be for the benefit of the respondent herein. The learned Counsel further pointed out that the respondent being a widow has completed the construction of the ground floor of the bungalow for the purpose of her own residence and her family member out of her own funds. The learned Counsel further pointed out that from the reply filed by the respondent she has categorically averred therein the fact that the respondent had completed the construction of the bungalow from her own funds for her own occupation in the disputed plot which was abandoned in the year 2003 by the appellant. The learned Counsel further pointed out that the appellant has not given accounts nor any amount to the respondent in respect of the partnership business and as such the appellant is not entitled for any relief in the above appeal. The learned Counsel has further pointed out that in the reply filed before this Court, the respondent has also produced an occupancy certificate issued to the respondent in the year 2010 which discloses that the occupancy certificate had already been issued to the respondent to occupy the bungalow which has been completed. The learned Counsel further pointed out that the respondent is already occupying the said bungalow for her residence and of her family members. The learned Counsel as such submits that considering the impugned judgment is discretionary order passed by the learned Judge, no interference is called for in the impugned judgment and the appeal deserves to be rejected.

I have carefully considered the submissions of the learned counsels. I have also gone through the impugned judgment and material on record. Prima facie, it appears that the disputed plot was an asset of the partnership firm. But however the records further reveal that on 21.12.2003, there was a meeting between the parties whereby the appellant and the respondent had amicably settled the dispute and agreed to allot specific properties of the partnership firm to the respondent as well as the appellant. In pursuance to the said settlement agreement, the appellant himself by a letter dated 26.01.2004 has categorically confirmed the fact that amongst the other assets the disputed plot and incomplete structure was allotted to the respondent. Apart from that, the records reveal that the licence from the statutory authorities was standing in the name of the respondent and that the respondent has now completed the construction work out of her own funds and has also obtained an occupancy certificate. Though Shri C. Mascarenhas, learned Counsel appearing for the appellant has disputed the right of the respondent to produce the occupancy certificate before this Court nevertheless considering that such certificate has come from the public office and the authenticity of the said certificate is not disputed by the appellant, I find that there is no reason not to consider the said aspect. The fact remains that it is not in dispute that presently the construction has been completed and the ground floor is completed and the respondent is occupying the said bungalow. The records further reveal that such occupation by the respondent is for her residence along with her family members. Considering the said factual situation, the question of granting an injunction in terms in which the appellant has prayed in the application u/s 9 of the Arbitration and Conciliation Act, 1996 would not be justified. Considering the situation at loco, the question of passing an order to that effect would not arise. But however, the fact that the appellant claims that the disputed plot is part of the assets of the partnership firm which according to the appellant has not been distributed nor legally transferred in favour of the respondent is a matter which would have to be decided by the learned Arbitrator in accordance with law. Considering that the learned Counsel appearing for the respondent does not dispute that the affairs of the partnership firm have not been wound up, I find in the interest of justice that some reliefs have to be granted to protect the interest of the parties. When asked the learned Counsel appearing for the respondent as to whether the respondent would carry out any further construction during the pendency of the Arbitration Proceedings, Shri A. Nachinolkar, learned counsel appearing for the respondent points out that she has no such intention to carry out any further extension or construction in the disputed plot. Apart from that, the respondent should also be restrained from creating any third party right or alienating the disputed plot during the pendency of the Arbitration Proceedings. The said reliefs have been considered in the peculiar facts and circumstances of the case and taking note of the contention of the learned Counsel appearing for the parties that the parties do not dispute that the affairs of the partnership firm have not yet been wound up. The observations made herein above are only prima facie for the purpose of deciding the application u/s 9 of the Arbitration and Conciliation Act, 1996 and the findings shall not in any way influence the learned Arbitrator while independently deciding the dispute on its own merits with regard to the claim of the parties in respect of the disputed plot. In view of the above, I pass the following order :

ORDER

(i) Appeal is partly allowed.

(ii) The respondent, her servants, agents, are restrained from carrying out any further construction in the disputed plot or creating any third party right or alienating the disputed plot until the disposal of the Arbitration Proceedings.

(iii) In case the respondent desires to carry out any such construction activity or create any third party right, liberty is given to the respondent to file an appropriate application to seek for modification of the said order in accordance with law.

(iv) The appeal stands disposed of accordingly with no order as to costs.