-Report by Harsh Singh Rajput

In the case of Delhi Development Authority and Govt. of NCT of Delhi vs Batti and others, the respondents in this case i.e., Batti and others filed a writ petition in Delhi high court to claim the compensation of the land which was taken by them 20 years back for the development project and later the two authorities i.e., plaintiffs appeal before SC against the compensation requested by respondents.

FACTS:

Delhi development authority and Govt. of NCT of Delhi appeal before the SC with the Civil Appeal no 2402/2008. Under section 4 of the land acquisition act, 1894(for short ‘the Act’) an order was passed on 23-06-1989 for the acquisition of land measuring about 3,500 hectares for the development of part of Delhi and this order was further followed up by notification under sec 6 of ‘the Act’ on 20 June 1990.

The respondent was the wife of Mange Ram who was the son of the Late Harkesh. The issue was that the late Father-in-law of respondent i.e., Mr. Harkesh was asserted as the owner of the 1/12th share i.e., (01 bighas and 19 biswas and 03 biswansi from the land area measuring upto 23 bights and 2 biswas having khasra no. 281/4(10-11). 282/4(10-3) and 80(2-8)).

Now writ petition was filed by the respondent in 2015. They stated that the other party hasn’t paid them the compensation and also the possession of land hasn’t been taken and the acquisition has lapsed. But the high court stated that the land was handed over to the forest department as per the facts after the possession of the land was taken. And it was taken because the land comes under the ‘O’ zone. And HC also stated the fact that land was also vested in Gaon Sabha. Therefore, the respondent will not be given any compensation and due to the dispute over the titles regarding land, the issue related to compensation was kept open.

The constitution bench stated two conditions to prove the acquisition which are as follows:

Taking over the possession of the land or,
Payment of compensation

And the bench stated that from the facts, we came to know that the acquisition was done after the land was taken in possession, and due to the dispute in the title, the HC also had kept the question of title open.

The question of acquisition which was holdup by the Delhi high court in this case by relying upon the judgment of this court (SC) in the case of Pune municipal corporate and another’s case ‘supra’ was overruled by relying on the judgment of this court in the Indore Development Authority.

RESPONDENT’S CONTENTION:

Learned counsel on behalf of the respondent provided the facts that respondent no. 1 is the daughter-in-law of later. Harkesh. Harkesh was entitled to compensation as he was the owner of the land as per the records and he also have the Bhoomidari rights. And they submitted that the land was not been taken up also by the authorities.

JUDGEMENT:

The honourable Supreme Court allowed the present appeals of the plaintiff and stated that there will not be any compensation to the predecessor or respondent due to the dispute regarding the title of the land, also the land was found to be recorded in the name of Gaon Sabha.

Also, there were no records of any action or step for seeking compensation on behalf of the respondents and the person who owned the land 20 years ago. So by putting aside the impugned order of HC, the present appeals are allowed and the writ petition of respondents in HC is dismissed.

READ FULL JUDGEMENT: https://bit.ly/3ZdLcPQ

Citation

(2003) 6 SCC 265

Decided On

9^th May 2003

Case Number

Civil Appeal No. 13337 of 1995

Bench

Bench: Shivraj V. Patil & K.G. Balakrishnan J.J.

Relevant Section

Section 32(2), 32(3) & 72 of Indian Partnership Act, 1932

Facts

The plaintiff filed two suits against the respondent. Respondent number 1 in both the suits is a partnership firm engaged in engineering works. Respondent numbers 2 to 4 are its partners. The first suit was filed to recover the amount of Rs. 59, 775.95/- with interest. The plaintiff alleged that a loan of Rs. 40,000/- was sanctioned in favor of the respondent on 5^th December 1974, for expansion of industry of the respondent. The loan was to be repaid after 9 months in installments. The respondent had also executed the requisite documents in favor of the plaintiff bank. Respondent number 2 & 3 in their written statement admitted that the respondent had borrowed Rs. 40,000/- from the appellant. The two respondents subsequently retired without giving any notice of this development to the appellant bank. The respondent defaulted on the payment of the loan. Trial Court held that respondents number 2 & 3 would not be liable for the suit claim & High Court upheld the decision of the Trial Court.

Another suit filed by the appellant against the respondents in Karnataka High Court alleged that the respondents were given an overdraft facility by the appellant bank; the respondent availed the facility & committed default in paying the same. Respondents raised similar contention as in the previous suit that the partnership was dissolved & respondent number 4 took entire liability. The contention was accepted by the Trial Court against respondents number 1 & 3 was passed. The plea was rejected by the High Court in which the appellant prayed that Decree shall be passed against all the respondents as all have joint & several liabilities. Hence, the plaintiff moved an appeal to the Hon’ble Supreme Court for the same.

Issue before the Court

Whether the retiring partner would be liable to pay for the liability incurred during partnership?

Whether respondents giving notice to the appellant bank regarding dissolution of the firm would absolve the retiring partner from dues?

Judgment

The appellant contended that all the respondents should be held jointly liable as they executed various documents to the said & had admitted its execution, the dissolution of the partnership firm will not affect their liability to discharge of the suit claim & inter se arrangements between the partners of the firm will not be binding on the appellant bank & as per clause 3 of Section 32 of the Act respondent number 2 & 3 cannot escape from the liability concerning the suit claim made by the appellant. In response, the respondent said as a prior notice was sent to the appellant bank about the dissolution of the firm & they did not raise any objection therefore, respondents numbers 2 & 3 are not liable for any under the suit as per clause 2 of Section 32 of the Act.

Hon’ble Supreme Court held that the appellant had every right to proceed against all the defendants present in the suit, Court also said that no public notice was given about the retirement of respondents number 2 & 3 from the partnership firm as envisaged under Section 32(3) of the Act. Court pointed out at one of the contentions made that the “dissolution of firm will not affect the respondents from liability retiring partners” by the appellant. Like the fact the appellant was aware of the dissolution of the partnership firm, as per section 32(2) of the Act, the liability of the retiring partner as against a third party would be discharged only if there was an agreement made by the retiring partners, the bank being the third party in this case & partners of the reconstituted firm, this was absent from the case expressly or impliedly.

Conclusion

Perhaps it is self-evident from the case that the creditor’s right normally will not be prejudiced by an agreement transferring an acquired liability from one partner to another in a partnership firm unless the creditor is made a party to the agreement. Otherwise, the agreement (regarding him) will be strictly res inter alias acta (transacted between other parties).

The case analysis has been done by Ajay Kataria, from Dr. B.R. Ambedkar National Law University, Sonepat, Haryana.

The case analysis has been edited by Shubham Yadav, from Banasthali Vidyapith, Jaipur.

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