R.L Sapra v. Om Prakash .

This revision petition, by the plaintiff under S. 115 of the Code of Civil Procedure, is directed against the order dated December 6, 1979 of the Senior Sub Judge, Delhi confirming the order dated October 29, 1979 of the Subordinate Judge Ist Class, Delhi, refusing to grant a temporary injunction restraining the respondent/defendant from dispossessing the plaintiff and removing power and telephone connections fitted on the first floor of property No. A-81/2. Wazir Pur Industrial Area, Delhi.

2. The petitioner and the respondent by a deed dated June 18, 1977 entered into partnership to carry on business under the name and style of ‘Mystika Industrial Electroplaters’ at A-81/2, Wazir Pur Industrial Area, Delhi. The investment and machinery was to be provided by the petitioner. The respondent was to provide only the said premises. The profits were to be divided in the ratio of 85% and 15% between the petitioner and the respondent the losses were agreed to be borne by the petitioner. The petitioner alone was responsible for running the day to day business of the partnership. The respondent did not have any right to receive or disburse any loan from any body on behalf of the firm. The parties also agreed that the firm would not be dissolved by reason of retirement, insolvency, disability or death of any partner and on the happening of any event, the remaining partner would be entitled to continue the business of the firm as per term No. 11. It was also provided that the terms of the partnership may be altered, modified, varied, added or cancelled by any agreement arrived at between and signed by them. On June 28, 1977 another agreement was executed between the parties by which it was agreed that in pursuance of the said partnership deed the petitioner would pay Rs. 1500/- per month as fixed profit to the respondent from July 1, 1977, that the respondent having no knowledge either technical or of any other nature would not be responsible for any loss or profit in the business of the partnership, that the work would be done and supervised by the petitioner, that the respondent would have no concern with the goodwill of the firm, that the partnership would be using the power, water and telephone No. 241823 facility which was in the personal name of the respondent and would bear the charges. On July 28, 1977 the respondent also executed a special power of attorney in favour of the petitioner authorising him to receive and deposit, pay or raise money for the purposes of financing the business of the partnership firm. The petitioner was further authorised to solely operate the bank account and that he would be responsible for repayment of the loans of the firm.

3. Some misunderstanding or dispute, it appears, arose between the parties resulting in the institution of the present suit on February 14, 1979 for declaration and injunction. The plaintiff pleads that he has been a tenant under the defendant with respect to the said premises at Wazir Pur Industrial Area, Delhi on a monthly rent of Rs. 1500/-, that the power and telephone connections have been in his actual use and possession, that he installed machinery in the said premises, that he has been carrying on the business since July 1, 1977 and paying monthly rent Rs. 1500/- by payees account cheques to the defendant who has not issued any receipt, that from the beginning the defendant had a mala fide intention of not executing a proper lease deed and by misrepresentation he got executed the said partnership deed, dated June 18, 1977 which is sham, fictitious, illegal and unenforceable in law, that the deed was never intended to be acted upon as the premises were let on a monthly rent of Rs. 1500/-, that the defendant has been threatening, to dispossess him from the premises and to remove machinery, the power connection and the telephone. The petitioner therefore prayed for the passing of:—

(a) a declaratory decree declaring the partnership deed dated 18-6-77 as illegal, unenforceable, obtained by fraud and misrepresentation;

(b) a declaratory decree declaring the plaintiff as a tenant in the premises, i. e. first floor consisting of one hall, five rooms, balcony, bathroom and latrine situated as A-81/2, Wazir Pur Industrial Area. Delhi-110052 at a monthly rent of Rs. 1500/- :

(c) a decree for permanent injunction restraining the defendant from dispossessing the plaintiff and removing the power connection No. 4AZK 904849 and telephone connection No. 741823 fitted in the said premises and in use of the plaintiff. Along with the plaint he also filed an application under Order 39, Rules 1 and 2 of the Code of Civil Procedure for temporary injunction for the said reliefs. The defendant-respondent in his written statement pleads that there was partnership between the parties, that plaintiff is not a tenant with respect to the said premises, that the firm was dissolved on February 12, 1979 on account of differences between the parties and nefarious activities of the plaintiff to harm the interest of the partnership, that the payees account cheques were received by him but it was not on account of rent but his withdrawals from the partnership, that the firm used to operate a bank account through the plaintiff as a partner, that the plaintiff has not given the particulars of the alleged misrepresentation or fraud. The execution of the partnership deed dated June 18, 1977 is admitted but the execution of the agreement dated June 28, 1977 as alleged by the plaintiff is denied by him.

4. The trial Court and the first Appellate Court refused to issue the ad interim injunction mainly on the ground that particulars of fraud, misrepresentation and undue influence alleged to have been practised upon the petitioner by the respondent were not set out in the plaint.

5. The learned counsel for the petitioner submits that the lower courts have failed to exercise jurisdiction vested in them and hence acted illegally and with material irregularity by refusing to grant the injunction. He says that the petitioner has been in possession of the premises, power and telephone connections, that he has been carrying on the business in the said premises since July 1977, that he has been regularly paying Rs. 1500/- per month to the respondent, that the deed dated June 18, 1977 labelled as partnership is in fact a lease deed, that the real intention of the parties was disclosed when the agreement dated June 28, 1977 was executed by the parties by which a fixed amount of profit at Rs. 1500/- per month from July 1, 1977 was agreed to be paid and the respondent was held to be not liable for any loss or entitled to profit. He submits that the lower courts have not appreciated, that there was prima facie case for the issue of the injunction, that the suit cannot be thrown out at this initial stage as it requires investigation, that during the period of investigation it is desirable to maintain the status quo. In other words he says that before going into the details of the dealings between the parties and seeing through the real intention of the parties as exhibited in the two documents dated June 18, 1977 and June 28, 1977 executed by the parties it was essential for the court to issue the injunction against the respondent.

6. It is not in dispute that the petitioner has been carrying on business since June 1977 in the said premises, that the power connection and the telephone are fitted therein and have been in his use, that he has been carrying on the business. It means that the suit requires consideration and it cannot be thrown out at the initial stage. Prima facie does not mean that the court is entitled to scrutinise the controversy on merits; balance of convenience and irreparable injury are also to be taken into consideration before granting an injunction. Further a document described as partnership may not in fact be a document of partnership because it may not disclose the real intention of the parties. Under the circumstances when, there is a dispute about a document, the court is to find out what was the real intention of the parties to the deed. Besides various other authorities of this court he relies upon Gurmukh Singh v. Inderprasth Finance Co., 1976 Rajdhani LR 1 and Sahab Dayal Chaman Lal v. M.C.D, 1976 Rajdhani LR 550 wherein it has been held that while deciding application for interim injunction trial court should determine limited question if case requires investigation and that it cannot transgress the limits by prejudging the case. There cannot be two opinions about this statement of law. Moreover true nature of a document cannot be disguised by labelling it something else. (See : Smt. Shantabai v. State of Bombay, AIR 1958 SC 532). In B.M Lal v. Dunlop Rubber and Co., Ltd., (1968) 1 SCR 23: (AIR 1968 SC 175) it is observed, (at p. 177 of AIR)- “The question is not of words but of substance and the label which the parties choose to nut upon the transaction, though relevant, is not decisive.” In that case the dispute was whether the transaction was a lease or a licence. The ratio of this judgment is that the substance of the document should be considered before determining its nature. The Supreme Court in Lakhi Ram Ram Dass v. Vidyat Cable and Rubber Industry, Bombay. 1970 Ren CJ 40 held that it was the duty of the court to go behind the facade and find out the real nature of the contract. In Sohan Lal Narain Dass v. Laxmidass Raghunath Gadit, (1971) 3 SCR 319 it was held, “Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Thus, I am of the view that the court is empowered to look into and determine the real intention between the petitioner and the respondent in executing the partnership deed dated June 18, 1977 and the agreement dated June 28, 1977 and the surrounding circumstances. It is correct that the agreement dated June 28, 1977 is not admitted by the respondent defendant but at this initial stage the Court should not scrutinise deeply into the matter. What is admitted is that the plaintiff is in possession and has been carrying on the business, that the firm is not liable to be dissolved by reason of retirement, insolvency, disability or death of any partner. It therefore appears that the plaintiff has a right to continue the business. I need not express any view one way or the other as it may prejudice the case of the parties but what I feel is that the facts of the present case do not show that the plaintiff has no case and his suit can be thrown out without any opportunity of hearing him in the matter. He has to prove the agreement dated June 28, 1977. After evidence, it may be held that the real intention between the parties was that the plaintiff became a tenant under the respondent with respect to the premises etc. The whole investment in the business was made by the petitioner. The machinery was purchased by the petitioner. The power connection and the telephone connection are no doubt in the personal name of the respondent but in terms of the agreement dated June 28, 1977 they are to be used by the petitioner. The respondent only provided the premises. The lower court it appears neither took into consideration the partnership deed nor the agreement dated June 28, 1977. Both the courts have refused the temporary injunction merely on the ground that the particulars of the alleged fraud were not pleaded as required by Order 6 Rule 4 of the Code of Civil Procedure. Reading of the plaint as a whole may disclose that certain facts were pleaded by the plaintiff to that effect but even if it is assumed that fraud is not proved the court has jurisdiction to determine the true nature of the relations between the parties under the two documents dated Jung 18, 1977 and June 28, 1977 and the surrounding circumstances. The plaintiff's case is that he is a tenant and not a partner which relation is to be determined by the court in view of the law laid down in the various authorities of the Supreme Court already referred to above. The balance of convenience is in favour of the plaintiff and he would suffer irreparable injury if he is dispossessed or the machinery, power connection or telephone connection is allowed to be removed. I am, therefore of the view that the court below was in error and committed material irregularity in the exercise of its jurisdiction by ignoring the material facts of the case in determining even prima facie whether the case required investigation. I find that if the order of the lower court is allowed to stand it would cause irreparable injury to the petitioner. He is to be protected during the trial of the suit. As already observed his allegations are not such that he should be non-suited without giving him proper hearing specially when he has been in possession and carrying on the business since 1977 without any interruption from the respondent-defendant up to the date of institution of the suit. It appears that the lower court failed to exercise by not applying its mind properly inasmuch as it failed to appreciate whether there can be a relationship of landlord and tenant between the defendant and the plaintiff with respect to the premises if the agreement dated June 28, 1977 is deemed to have been executed by the defendant and the surrounding circumstances.

7. The learned counsel for the respondent submits that this court should not interfere its revisional jurisdiction when the two courts have refused to grant the injunction. It appears that the lower court in the exercise of its jurisdiction acted with material irregularity in ignoring material facts and documents. The entire approach of the lower court is contrary to law. The injunction was refused on the ground that the particulars of the alleged fraud and misrepresentation were not pleaded. It was however not considered whether the plaintiff had a case which required consideration. The plaintiff's suit is not bound to fail for some inherent defect. As a matter of fact as already stated the effect of the two documents has not been taken into consideration by the court below. These documents appear to have been ignored merely on the ground that the agreement is still to be proved. When agreement dated June 28. 1977 was still to be proved, it is a further reason that the plaintiff is entitled to an opportunity to prove his case in the surrounding circumstances. The Photostat copy of the agreement has been filed on the record. It is attested by two witnesses. No affidavit has been filed on behalf of the defendant sworn by any of the two witnesses that the agreement was not executed by the defendant. In the absence of any definite evidence of non execution of the agreement the plaintiff cannot be non-suited at this stage. I am, therefore of the view that this court has jurisdiction to interfere when the lower court in the exercise of its jurisdiction acted with material irregularity. I therefore set aside the order of the lower court and grant an injunction to the petitioner restraining the respondent from dispossessing the petitioner from the suit premises and removing power and telephone connections fitted in the premises A-81/2. Wazir Pur Industrial Area, Delhi (first floor) in possession of the petitioner till the decision of the suit. The plaintiff however as admitted by him is liable to pay Rupees 1500/- per month from July 1977 and therefore he should deposit Rupees 1500/- per month till the decision of the suit in the trial court. It is admitted that some amount has been paid to the defendant while some was deposited by the plaintiff in the trial court. The plaintiff is directed to deposit at the rate of Rs. 1500/- per month for the period from July 1, 1977, and shall continue to deposit Rs. 1500/- per month by the 15th of the succeeding month, after adjusting the amount already paid to the defendant or deposited in the trial court. The plaintiff may deposit the arrears up to July 15, 1981. There will be no order as to costs.

Order accordingly.