SUBODH KUMAR GUPTA Vs. SHRIKANT GUPTA

JUDGEMENT

(1.) The petitioner is the original plaintiff. He filed a suit in the Court of the learned Senior Judge, Chandigarh, for dissolution of the firm carrying on business in the name and style of M/s. Rajaram and Brothers of which he claimed to be a partner along with his father, brothers and one K.K. Jindal. Each partner had 20% share in the profits and losses of the firm and the partnership was one at will. The head office of the firm was situate at Bombay where it was registered with the Registrar of Firms. Its factory was situate at Mandsaur where the father Rajaram Gupta lived with his sons and attended to the partnership business. The plaintiff also was residing at Mandsaur till 1974 when he shifted to Chandigarh. After he shifted to Chandigarh he visited Mandsaur oft and on in connection with the business of the firm. His case is that after he shifted to Chandigarh he used to call for and receive statements of accounts of the business carried on at Mandsaur and he also received and booked orders for the firm at Chandigarh which he forwarded to Mandsaur for execution. According to him, the branch, office of the firm was at Chandigarh as is evident from the stationery of the firm. According to him, his father shifted from Mandsaur to Rajnandgaon sometime in the year 1980 and thereafter his brothers Shrikant Gupta and Suryakant Gupta were virtually in charge of the business at Mandsaur. Certain disputes arose as regards the management of the partnership business and consequently the correctness of the accounts maintained by Shrikant Gupta and Suryakant Gupta at Mandsaur became suspect. The plaintiff further contended that he had sent his representative to Mandsaur to check the accounts but his two brothers did not permit him to do so. He also personally went to Mandsaur and it appears from the averment in the plaint that his brothers were not cooperative and in fact some criminal complaints came to be lodged in regard to certain incidents which happened at Mandsaur while he was there. In the end the father Rajaram Gupta went to Mandsaur and later a meeting took place at Bhilai on 26th November, 1992. At the said meeting an agreement was drawn up for the dissolution of the partnership firm and for distribution of its assets amongst the partners. It was mentioned in the agreement that it will ensure for one month meaning thereby that the accounts of the partnership would be settled within that time. The plaintiff now contends that the said agreement is void since material facts were suppressed by his two brothers and in any case the accounts were riot settled within the period of one month. He also contends that certain assets owned by the firm were not included in the agreement and that also rendered the agreement void and unenforceable in law. He, therefore, contended that the agreement had to be ignored and the firm was required to be dissolved and accounts to be settled by the appointment of a Commissioner. He also claimed certain other incidental reliefs.

(2.) The first defendant Shrikant Gupta entered an appearance and raised a preliminary contention that on the averments in the plaint the Court at Chandigarh had no jurisdiction to entertain and decide the suit. He contended that from the averments in the plaint it is manifest that the head office of the firm was situated at Bombay, that none of the defendants was residing or carrying on business within the territorial jurisdiction of the Chandigarh Court and that no part of the cause of action had arisen therein. The learned Trial Judge dismissed the application holding that a part of the cause of action had arisen within the territorial limits of the Chandigarh Court. However, on revision, a learned single Judge of the High Court after carefully analysing the averments in the plaint came to the conclusion that on the mere allegation that the firm had a branch office at Chandigarh the Court at Chandigarh could not be invested with jurisdiction since no part of the cause of action had arisen within its jurisdiction. The learned Judge in the High Court observes : "With regard to the allegation made by the plaintiff that the firm has its branch office at Chandigarh, suffice it to say that apart from the bald allegation made in the plaint, there is nothing on record to prove that the firm has any regular branch office at Chandigarh. Moreover, the fact that the firm has a Branch office at Chandigarh is also not sufficient enough to confer jurisdiction on a Court at Chandigarh unless it is established that cause of action, on the basis of which relief is being claimed, has arisen within the territorial jurisdiction of that Court. In the present case, apart from other, the factory of the firm as well as the assets of the firm are also situated outside the territorial jurisdiction of Court at Chandigarh. The relief sought in the suit is the dissolution of the firm and rendition of accounts of a firm which has its factory at Mandsaur and Head Office at Bombay. In this view of the matter, I am of the considered view that the Court at Chandigarh has no jurisdiction to entertain the suit."

(3.) Sections 15 to 20 of the Code of Civil Procedure indicate the place where a suit can be instituted. Section 15 states that every suit shall be instituted in the Court of the lowest grade competent to try it. Section 16 then proceeds to state that the suit shall be instituted where the subject-matter is situate. Then comes Section 20 which is relevant for our purposes. It reads as under :