1. Respondents (hereinafter referred as "Plaintiffs") have filed special Civil Suit No.80 of 2009 before Civil Judge, Senior Division, Jalgaon. The suit has been brought against present Applicants (hereinafter referred as "Defendants") for recovery of possession of property leased and recovery of lease amount. The dispute which has arisen between the parties is, whether Plaintiffs who have styled themselves as "Shreeji Enterprises Erandol" and shown themselves as partners, is a partnership under the Indian Partnership Act, 1932 ("Partnership Act" in brief).
2. Prakash Bhatia and other three arrayed above, have filed the suit claiming that the property in dispute was leased out to Defendants Indian Oil Corporation by one Sarla Bahubali Gangwal. The Plaintiffs purchased the suit property from Sarla Bahubali Gangwal by registered sale deed, with right to the lease rent and as the rent was in arrears, the lease has been terminated and the possession has been claimed along with lease amount due.
3. The Defendants filed Written Statement and inter-alia, contended that the Plaint discloses that suit is filed by partnership firm but the entire Plaint does not disclose that said partnership firm is registered and so the suit is bad on account of provisions of Section 69 of the Indian Partnership Act. The trial Court has heard the parties and passed orders below Exhibit1, framing issue, whether the suit is maintainable, and for reasons recorded, it has held that the suit is maintainable, as according to the trial Court, the Plaint and documents produced at this juncture, are not sufficient to label "Shriji Enterprises" as partnership firm and thus Section 69 of the Partnership Act does not apply.
4. Against the above order dated 7th March 2013, present Revision has been filed.
5. Learned counsel for the Defendants (present Applicants) has referred to copy of the sale deed (Exhibit A) and submitted that the document mentions regarding the purchasers to be "partners" of "Shriji Enterprises Erandol" and then the names of four persons who have now brought the Suit, have been mentioned. At the end of the document also, the four persons have signed under the caption that they were signing as partners of "Shriji Enterprises Erandol". The counsel then referred to a document got issued from Directorate of Industries, dated 30th August 2013, which, according to the Defendants, is certificate obtained for seeking exemption in payment of stamp duty. It is argued that in this document also, it is mentioned that Shriji Enterprises is establishing a unit. The learned counsel then referred to the title of the suit where plaintiff is styled as "Shriji Enterprises Erandol" through partners and the names of four persons are given. It is the argument that all this shows that the Plaintiff is a partnership and the suit does not show that the partnership has been registered and so under Section 69(2) of the Partnership Act the suit to enforce rights is not maintainable. The learned counsel relied on the Judgment in the matter of IshwarBhuvan Refreshments Annexe vs. Rajdhani and another, reported in 2006(5) Bom.C.R. Page 11, and the matter of Kolhapur Ice And Cold Storage Co. Through Partner vs. Rajput Dairy Through Brijlal Uddip Singh, reported in 2014(1) Mh.L.J. Page 367, in support of his contentions that the suit by unregistered partnership is not maintainable. It is submitted that parties have not led evidence regarding the issue in the trial Court, is also material aspect.
6. Against this, learned counsel for Plaintiffs (present Respondents) referred to the affidavit-in-reply filed by the Respondents in this Petition and has submitted that although Prakash Bhatiya and other three persons have brought the suit styling themselves as "Shriji Enterprises" and partners, it is not actually a partnership firm. It is submitted that the nomenclature will not decide the relationship and these persons are pursuing their rights in individual capacity and as co-owners of the property which they have purchased. It is stated that these persons are not doing any business and there is no agreement to share profits and no ingredients of partnership firm are attracted. The Plaint has been signed and verified by all the four persons. It is stated that the question whether or not really there is a partnership can be kept open and it can be seen at the time of trial when evidence is led, whether there is a partnership as per Partnership Act, or not. Learned counsel places reliance on the matter of UjawalabenMahindra Shah and another vs. Kesharchand Gulabchand and others, reported in 2001 (Suppl.2) Bom.C.R. 778, to submit that the issue whether partnership exists, is a question of fact and law and cannot be tried as preliminary issue. Reliance is also placed on the case of Sanjay Kanubhai Patel vs. Chief Controlling Revenue Authority and another, reported in 2004(6) Bom.C.R. 94, to submit that merely because Prakash Bhatiya and others have joined to share profits of the lease rent and purchased property, it will not constitute a partnership.
7. In the matter of IshwarBhuvan Refreshments Annexe vs. Rajdhani and another (supra) relied on by the learned counsel for Defendants, the plaintiff in that matter had claimed to be a registered partnership firm running a restaurant under the name and style of "Rajdhani" and wanted to restrain defendant therein from using the same mark Rajdhani. In that context, it was found that not producing certificate of registration from Office of Registrar of Firms was material and as plaintiff failed to produce the certificate inspite of opportunity, the suit was found to be not maintainable. In the present matter, the facts are different. Here the affidavit in reply filed by the Plaintiffs claims that Shriji Enterprises is not a partnership firm which is carrying on any business. It is claimed that there is no agreement of partnership between the persons who have come together as Plaintiffs.
8. The other Judgment relied on by the Defendants is in the matter of Kolhapur Ice and Cold Storage Company (supra). There also undisputedly the petitioner concerned had filed suit for recovery of amounts of goods supplied. The issue involved in that matter was, whether subsequent registration of the partnership deed would cure the defect of filing of the suit in the name of unregistered firm and whether the suit can be deemed to have been filed on the date when the firm has been registered. Thus, on facts the said matter is different and not of assistance to decide present controversy.
9. If Judgment in the matter of Sanjay Kanubhai Patel (supra) relied on by the Plaintiffs is perused, it was a matter where parties had titled the document as a joint venture agreement and superintendent of Stamps treated the same as a partnership deed for the purposes of stamp duty. In that context, the Court considered the provisions of Partnership Act.
For present matter also the provisions of Partnership Act are material and they need to be reproduced. Section 4 and 6 of the Partnership Act read as under:
"4. Definition of "partnership", "partner", "firm" and "firm-name"
"Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually, "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm-name".
"6. Mode of determining existence of Partnership
In determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together.
Explanation I. The sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not of itself make such persons partners.
Explanation II. The receipt by a person of a share of the profits of a business, or of a payment contingent upon the earning of profits or varying with the profits earned by a business, does not of itself make him a partner with the persons carrying on the business;
and, in particular, the receipt of such share or payment-
(a) by a lender of money to persons engaged or about to engage in any business
(b) by a servant or agent as remuneration,
(c) by the widow or child of a deceased partner, as annuity, or
(d) by a previous owner or part-owner of the business, as consideration for the sale of the goodwill or share thereof, does not of itself make the receiver a partner with the persons carrying on the business."
10. In the matter of Sanjay Kanubhai Patel (supra), after referring to the above provisions, it was observed in Para 8 as under:
"8. It is settled law that three essential ingredients are necessary before the relationship between persons can be said to constitute a partnership. There should be an agreement between the parties, the agreement must be to share the profits of the business and the business must be carried on by all or any of them acting for all. The third ingredient relates to the existence of an agency between the concerned persons inter se. While establishing the first two ingredients, there is usually no real difficulty, it is the establishment of an agency that requires careful consideration. It is settled law that all the three elements must be present to conclude that the persons are partners."
Further observations in Para 12 are as under:
"12. It is settled law that the nomenclature given by parties to the relationship or documents makes no difference. Thus, for instance, merely because Clause 27 of the Joint Venture Agreement states that the agreement should not be construed as a partnership, if in fact all the three elements essential to constitute a partnership were present, the relationship between the parties to the same would be that of partners. Such a clause would be only one of the factors to be considered while determining whether the persons are partners or not. Conversely, even if the deed was termed as a partnership agreement, it would not necessarily constitute a relationship of partners between the parties thereto if it is found that any of the elements necessary to constitute a partnership were absent."
11. In the matter of Sanjay Kanubhai Patel (supra), this Court in this regard also referred to observations of Division Bench in the matter of ChimanramMotilal and another vs. Jayantilal Chhaganlal and another, reported in A.I.R. 1939 Bom. 410.
12. What is clear from above discussion is that there has to be an agreement and the same has to be to share profits of a business between the persons and an element of agency is also required in order to constitute partnership. Section 5 of the Partnership Act specifies that the relation of partnership arises from contract and not from status. Section 6 lays down the mode of determining existence of partnership. The Section clearly states that "regard shall be had to the real relation between the parties, as shown by all relevant facts taken together." Considering these aspects, it is apparent that although Plaintiffs have styled themselves as partners of "Shriji Enterprises", whether or not it is really a partnership, would be matter of facts. The trial Court has rightly observed that the Plaint and documents produced on record, at this juncture, are not sufficient to label Shriji Enterprises as a partnership firm.
13. In the matter of UjwalabenMahindra Shah(supra) relied on by learned counsel for Plaintiffs (present Respondents), there was dispute raised regarding partnership being unregistered and the trial Court had rejected application to treat issue No.1 as preliminary issue and to decide it accordingly. This Court referred to the case law and observed in Para 16 as under:
".... it is now well established that once it is not in dispute that an issue is a mixed question of law and facts, then there is no obligation cast upon the Court to try the same as the preliminary issue, much to the contrary, the same may be tried along-with other issues in the suit as the Court is bound to pronounce judgment on all issues involved in the suit."
Looking to the controversy, Trial Court can thus decide the issue treating it as a mixed question of law and facts, along with other issues.
14. For reasons discussed above, I do not find any substance in the Revision Petition. It cannot be said that the trial Court has acted in exercise of its jurisdiction illegally or with material irregularity.
15. The Revision Application is dismissed. Parties to bear their own costs.
After pronouncement of the order, counsel for Applicants seeks extension of interim stay which was granted when Revision was pending. Suit concerned is of 2009, held up at the stage of preliminary issue. There is no reason to keep further process in the Suit stayed. Request is declined.