Appeal No. R-170 of 2013. Case: Achala Gupta Vs Bank of Baroda. Allahabad DRAT DRAT (Allahabad Debt Recovery Appellate Tribunals)
| Case Number | Appeal No. R-170 of 2013 |
| Counsel | For Appellant: Kushal Kant and Piyush Kumar Tiwari, Advocates and For Respondents: Rajesh Maindiretta, Advocate |
| Judges | R.K. Gupta, J. (Chairperson) |
| Issue | Indian Partnership Act, 1932 - Sections 14, 15, 17, 29, 30, 31, 32, 36, 37, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 40, 48; Recovery Of Debts Due To Banks And Financial Institutions Act, 1993 - Sections 20, 30; Registration Act, 1908 - Sections 17, 17(1), 17(1)(c), 29(1), 4; Transfer Of Property Act, 1882 - Sections ... |
| Citation | III (2014) BC 85 (DRAT) |
| Judgement Date | October 08, 2013 |
| Court | Allahabad DRAT DRAT (Allahabad Debt Recovery Appellate Tribunals) |
Judgment:
R.K. Gupta, J. (Chairperson)
1. The present Appeal has been preferred by the appellants under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 challenging the order passed by the Tribunal on 12th July, 2013 while exercising the powers vested with it under Section 30 of the said Act, 1993. The relevant facts for adjudication of the present case are that according to the appellant No. 1 she is the owner of the property in question. The appellant No. 2 was the guarantor and the loan transaction was made in favour of the Certificate Debtor firm namely United Soya Products Ltd. The Bank filed a Civil Suit for recovery of its dues and ultimately the said Civil Suit could not be decided by the Civil Court and after promulgation of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the said Civil Suit was transferred to Debts Recovery Tribunal which was registered as T.A. No. 1172/1998 and the same was allowed by the Debts Recovery Tribunal by its order dated 16th August, 2000 and the Recovery Certificate was issued. The appellant No. 2 was also jointly and severally held liable to the due alongwith principal borrower.
2. After when the said certificate was issued then the land bearing Khasra Nos. 367-374-386/4/1/1, 373/1, 375 and 377 admeasuring 12.31 acres, situated at P.H. No. 42, Village Bawariya Kalan, Tehsil Huzur, District Bhopal, M.P. was attached by the Recovery Officer. The proceedings for attachment were initiated by the Recovery Officer on the basis of the information in Form 17 submitted by the Bank. The property was to be put to auction by the Recovery Officer but the Recovery Officer by his order dated 15th June, 2012 on the objection filed by the appellant No. 1 directed to maintain status quo with the result that the property could not be put to auction.
3. According to the appellant No. 1 she was the owner of the property and according to the Bank the said property belongs to appellant No. 2 and therefore, the order for attachment was passed. The Recovery Officer passed the final order on 9th August, 2012 by which the objection raised on behalf of the appellant No. 1 was allowed and the property was released but so far as the remaining property was concerned, there was no order to release but the property of which the description has been given hereinabove belonging to the appellant No. 1 was released.
4. Against the order passed by the Recovery Officer, the Bank preferred an appeal under Section 30 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 to the Presiding Officer of Debts Recovery Tribunal and the Debts Recovery Tribunal vide the order impugned dated 12th July, 2013 allowed the Appeal preferred by the Bank and set aside the order dated 9th August, 2012 passed by the Recovery Officer by which the objection so raised by the appellant No. 1 was accepted.
5. In the present case, the Recovery Officer found that the property belongs to the appellant No. 1 and the Recovery Officer further observed that the property of which the description has already been given hereinabove does not belong to the appellant No. 2. The learned Counsel appearing for the appellant submitted that in the present case, the order passed by the Tribunal does not deal with the correct position of law and it was further submitted that the Tribunal has not in fact decided the clinching issue in relation to the property and unnecessarily has referred to Section 52 of the Transfer of Property Act in which the principal of lis pendens in enunciated. It is submitted that the said lis pendens is not applicable in the present facts and circumstances of the case. The learned Counsel appearing for the appellant further submitted that in the present case the clinching issue had been whether the property which was initially belonging to the appellant No. 2 the details of which has been given in earlier paragraph and whether has legally been passed on to the appellant No. 1.
6. There is no dispute that the property in question initially was belonging to the appellant No. 2. A partnership deed was entered into between both the appellants on 5th April, 2001. The said partnership deed has been placed on record at page No. 203 of the paper book. The partnership deed is between R.K. Tower (India) Pvt. Ltd. and Smt. Achla Gupta and the recital of the said partnership deed states that R.K. Tower (India) Pvt. Ltd. owned and possess the land situated at Village Bawadia Kalan P.C. No. 42. Tehsil Huzur, Distt. Bhopal being revenue Khasra Nos. 367-374-386/4/1/1 admeasuring 8.66 acres, Khasra No. 373/1 area 2.74 acres. Khasra No. 375 area 0.43 acres and Khasra No. 377 area 0.30 acres total Nos. 04 and total area 12.13 acres and R.K. Towers (India) Pvt. Ltd. wants to develop his said land as per use proposed by the Bhopal Master Plan, but due to lack of Working Capital, both the said parties forming a firm known as "Achalashraya Developers" for putting up a commercial & residential project on the said land, which is contributed by R.K. Towers (India) Pvt. Ltd. the appellant No. 2 as his capital in the said firm, which shall now become absolute property of the firm i.e. Achalashraya Developers. It was further stipulated that the Working Capital of the partnership shall be contributed by appellant No. 2 only as per accounts book of the firm but the said party shall have no right to claim any interest on the said amount. Thereafter, the firm was finally dissolved on 18th May, 2002. The deed of dissolution has also been placed on record as Annexure No. A/9 with the paper book. According to the deed of dissolution entered into between R.K. Towers (India) Pvt. Ltd. and Smt. Achla Gupta a joint declaration was made that the partnership carried on under the deed of partnership dated 5th April, 2001 between these two parties was liable to be treated to have been dissolved by mutual consent as no business activity has taken place till date and the appellant No. 2 was not able to continue the partnership hence that deed of dissolution was executed and consequently business of said partnership firm was to be carried out with all assets and liabilities of firm by the remaining partner, i.e. the appellant No. 1 and she became proprietor of said firm being only left as partner and the appellant No. 2 surrendered all his claims and entitlements which might have been legally available prior to this deed of dissolution of partnership under reference hence the appellant No. 2 shall have no right to claim any assets of the firm including land situated at Village Bawaria Kalan which was the absolute property of the firm. There were only two partners in the said firm and after relinquishment of claim by R.K. Towers (India) Pvt. Ltd. in favour of the appellant No. 1, the said firm became proprietorship firm and the appellant No. 1 being the proprietor of the said firm, the property passed on to her. After deed of dissolution, the name of the appellant No. 1 was mutated in the revenue record which are also placed on record.
7. On the basis of the aforesaid, this is to be seen that whether the arrangement is as per law which has been made between the appellants in constituting the partnership firm and also in dissolution of the partnership firm and whether on the dissolution of said firm the property whether has legally been passed on to the appellant No. 1 and the property as such whether has become the personal property of the appellant No. 1.
8. Admittedly, in the present case the property in question was not mortgaged but the property was attached by the Recovery Officer on the basis of the Form No. 17 filed by the Bank before the Recovery Officer. The Bank assumed that the property as such was belonging to the appellant No, 2 who was a guarantor. The arrangement which has been made hereinabove to answer the aforesaid question, it would be proper to refer to herein Sections. 14, 15 and 40 of the Indian Partnership Act, 1932 which are being quoted as under:
"14. The property of the firm--Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm, or acquired, by the purchaser or otherwise, by of for the firm, or for the purposes and in course of the business of the firm, and includes also the goodwill of the business.
Unless the contrary intention appears, property and rights and interest in property acquired with money belonging to the firm are deemed to have been acquired for the firm.
Goodwill is an asset of partnership--It was held by the Allahabad High Court in view of Section 14 of the Partnership Act, 1932 it cannot be denied that goodwill of a Partnership is an asset of the partnership. But the section does not lay down that every partnership has goodwill, or that the goodwill of every partnership has any substantial value.
Individual asset of partner.--A partnership firm is an association of persons but in spite of that unity between themselves, every partner can have his own separate existence from the firm. Any right which a partner has over any property, other than the partnership property, would remain as his individual asset. The mere fact that the particular person has chosen to...
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