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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 30TH DAY OF JULY 2021
BEFORE
THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD
WRIT PETITION NO. 6400/2019 C/W
WRIT PETITION NO. 4710/2021 (GM-CPC)
IN WP NO. 6400/2019
BETWEEN :
M/S NARAYANA SWAMY & SONS A PARTNERSHIP FIRM NO.33 (NEW NO.20) VANIVILAS ROAD BASAVANAGUDI BENGALURU - 560 004 REPRESENTED BY ITS MANAGING PARTNER MR N. VENKATESH.
SMT N. LEELAVATHI W/O LATE SHRI B.M. NARAYANASWAMY AGED 84 YEARS PRESENTLY R/AT NO.33 (NEW NO.20) VANIVILAS ROAD BASAVANAGUDI BENGALURU - 560 004.
SMT N. VASANTHALAKSHMI D/O LATE SHRI B. M. NARAYANASWAMY AGED 63 YEARS PRESENTLY R/A, NO.33 (NEW NO.20) VANIVILAS ROAD, BASAVANAGUDI BENGALURU - 560 004.
SHRI N. VENKATESH S/O LATE SHRI B. M. NARAYANASWAMY AGED 55 YEARS R/A NO.10, WEST COTT ROAD ROYAPETTAH, CHENNAI - 600 014. ... PETITIONERS (By SRI. ASHOK B. PATIL., ADVOCATE)
AND :
M/S REVAJEETHU BUILDERS & DEVELOPERS NO.594, 5TH MAIN, 11TH CROSS SADASHIVANAGAR BENGALURU REPRESENTED BY ITS PARTNER SRI T N UMESH S/O OF SRI TALAM N. NANJUNDA SETTY NO.133, RAILWAY PARALLEL ROAD BENGALURU - 560 020.
SRI JAGANATHA A S/O LATE DR P T A CHETTE AGED 72 YEARS R/AT NO.33 (NEW NO.20) VANIVILAS ROAD BASAVANAGUDI BENGALURU - 560 004.
SMT J SWARNA W/O MANJUNATH AGED 40 YEARS R/AT NO.33 (NEW NO.20) VANIVILAS ROAD BASAVANAGUDI BENGALURU - 560 004.
MS J SOWMYA D/O JAGANATHA A AGED 38 YEARS
3 R/AT NO.33 (NEW NO.20) VANIVILAS ROAD BASAVANAGUDI BENGALURU - 560 004.
J. AJAY S/O JAGANATHA A AGED 38 YEARS R/AT NO.33 (NEW NO.20) VANIVILAS ROAD BASAVANAGUDI BENGALURU - 560 004.
SHRI N. VISHWANATH S/O LATE SHRI B M NARAYANSWAMY AGED ABOUT 61 YEARS PRESENTLY R/A NO.33 (NEW NO.20) 1ST FLOOR, VANIVILAS ROAD BASAVANAGUDI BENGALURU - 560 004.
SHRI G. ANANTHASWAMY AGED ABOUT 73 YEARS S/O LATE B M GOVINDASWAMY R/AT NO.6/1 AND 6/2 SOUTH END ROAD BASAVANAGUDI BENGALURU - 560 004.
SRI G. PRABHAKARA AGED 64 YEARS R/AT NO.6/1 & 6/2 SOUTH END ROAD BASAVANAGUDI BENGALURU - 560 004.
SHRI G. KUMARASWAMY S/O LATE GOVINDASWAMY AGED ABOUT 61 YEARS PARTNER M/S NARAYANA SWAMY & SONS
4 A PARTNERSHIP FIRM NO.6/1 & 6/2 DASARAHALLI VILLAGE SOUTH END ROAD BENGALURU - 560 004.
SRI L. PREMAKISHORE AGED ABOUT 60 YEARS S/O LATE SRI B M LAKSHMANAMURTHY R/AT NO.17, 15TH CROSS B E M L LAYOUT BASAVESHWARANAGAR BENGALURU - 560 079.
SRI L SHAILESH AGED ABOUT 51 YEARS S/O LATE SRI B M LAKSHMANAMURTHY R/AT NO.90, 2ND MAIN ROAD 7TH BLOCK, JAYANAGAR BENGALURU - 560 082.
B. S. PRAKASH S/O LATE SRI B. M. SHRINIVASAMURTHY AGED ABOUT 35 YEARS R/AT NO.17, 15TH CROSS BEML LAYOUT BASAVESHWARANAGAR BENGALURU - 560 079.
SHRI ADITYA S/O SRI PREM KISHORE AGED ABOUT 35 YEARS REPRESENTED BY HIS FATHER AND NATURAL GUARDIAN SRI L PREM KISHORE R/AT NO.17, 15TH CORSS B E M L LAYOUT BASAVESHWARANAGAR BENGALURU - 560 079.
5 14. SMT D. SHAKUNTHALA AGED ABOUT 75 YEARS W/O SRI L SHAILESH RESIDING AT NO.90 2ND MAIN ROAD, 7TH BLOCK JAYANAGAR, BENGALURU - 560 082.
S. SHAMBHAVI AGED ABOUT 27 YEARS D/O SRI L SHAILESH REPRESENTED BY HER FATHER AND NATURAL GUARDIAN R/AT NO.90, 2ND MAIN ROAD 7TH BLOCK JAYANAGAR BENGALURU - 560 082.
SARALA D/O LATE SRI B S LAKSHMANAMURTHY AGED ABOUT 63 YEARS R/AT 12/A, R V LAYOUT K P WEST, BENGALURU - 560 020.
SHRI K. T. RAJASHEKAR PROPRIETOR M/S S R S TRAVELS NO.321, TSP ROAD KALASIPALYAM BENGALURU - 560 002.
M/S RANGANATH & SONS RETD. BY ITS PARTNER MR LOKNATH NO.1/47, VASAVI TEMPLE ROAD SAJJAN ROA CIRCLE V V PURAM, BENGALURU - 560 004.
... RESPONDENTS
(By SRI.L.M. CHIDANANDAYYA., ADVOCATE FOR R1; NOTICE TO R2 TO R18 DISPENSED WITH VIDE COURT ORDER DATED 26.03.2019)
6 THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DATED 09.01.2019 (ANNEXURE-L) PASSED BY THE 31ST ADDL. CITY CIVIL AND SESSIONS JUDGE, AT BENGALURU (CCH-14), PASSED IN OS NO.2265/1996.
IN WP. NO.4710/2021
BETWEEN :
M/S NARAYANASWAMY AND SONS A PARTNERSHIP FIRM, NO. 33 (NEW 20) VANIVILAS ROAD ROYAPETTAH, BASAVANAGUDI BASAVANAGUDI - 560 004 REPRESENTED BY ITS MANAGING PARTNE, SHRI .N.VENKATESH S/O B.M. NARAYANASWAMY.
N VENKATESH S/O B.M. NARAYANASWAMY, AGED 57YEARS, PERSENTLY AT NO.25, WEST COTT ROAD, ROYAPETTAH, CHENNAI - 600 014. ... PETITIONERS (By SRI. ASHOK B PATIL., ADVOCATE)
AND :
SHRI N. VISHWANATH S/O B.M. NARAYANASWAMY, AGED 63 YEARS, R/AT NO.20(1ST FLOOR), VANIVILAS ROAD, BASAVANAGUDI, BENGALURU - 560 004.
7 2. SHRI G. KUMARASWAMY S/O B.M. GOVINDASWAMY, AGED ABOUT 68 YEARS, R/AT NO.20, VANIVILAS ROAD, BASAVANAGUDI, BENGALURU - 560 004.
SHRI K. T. RAJASHEKAR S/O LATE THIMMEGOWDA,. AGED ABOUT 77 YEARS, R/AT NO.321, TSP ROAD, OPPOSITE BANGALORE MEDICAL COLLEGE, BENGALURU - 560 002.
M/S RANGANATH AND SONS R/AT NO.1/47, VASAVI TEMPLE ROAD, SAJJANRAO CIRCLE, VISHVESHWARAPURAM, BENGALURU - 560 004. REPRESENTED BY ITS PROPRIETOR, SHRI.R.LOKANATH.
... RESPONDENTS (By MS.RAKSHITHA D.J, ADVOCATE FOR R1; NOTICE TO R2 TO R4 DISPENSED WITH VIDE COURT ORDER DATED 6.3.2021)
THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE AD-INTERIM ORDER DATED 15.02.2021, PASSED BY THE IN-CHARGE COURT OF 31ST ADDL CITY CIVIL AND SESSIONS JUDGE (CCH-14) ON IA NO.3 IN OS NO.5523/2014 VIDE ANNEXURE-W.
THESE WRIT PETITIONS COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:
8 O R D E R
Mr. Ashok B. Patil, learned counsel for the petitioner, who is common in both the writ petitions, Mr. L.M. Chidanandayya, learned counsel for the first respondent in Writ Petition No.6400/2019 and Ms. Rakshitha D.J, learned counsel for the first respondent in W.P. No.4710/2021, are heard for final disposal with their consent though listed for orders on pending applications.
The controversies, in the two suits in O.S. No.2265/1996 and O.S. No.5523/2014 both pending on the file of the XXXI Additional City Civil Judge, Bengaluru, are between the firms, M/s Narayanaswamy and sons [hereafter referred to as M/s NSS] and M/s Revajeethu Builders and Developers [hereafter referred to pay M/s RBD], and inter se the partners of M/s NSS, including the dispute on the status of Sri. N Vishwanath as a partner of the firm.
9 3. M/s RBD has filed the suit in O.S. No.2265/1996 against M/s. NSS and others for recovery of Rs.52,97,111/- along with interest @ 18% per annum from the date of payment. Though M/s RBD has sought for joint and several liability decree against M/s NSS and all the others in the suit, it has also, in the alternative, sought for joint and several liability decree as against certain sets of defendants alleging specific payments to these sets of defendants as partners of the firm. Mr. N Vishwanath, who claims to be one of the partners of M/s NSS, has filed the other suit in O. S. No.5523/2014 against M/s NSS and others for accounts and other relied. 4. M/s NSS has filed the writ petition in W.P. No.6400/2019 impugning the order dated 09.01.2019 in O.S. No.2265/1996, and M/s NSS has also filed the other writ petition in W.P. No.4710/2021 impugning the order dated 15.02.2021 in O.S. No.5523/2014. The details of the impugned orders are as follows.
10 [a] In O.S. No.2265/1996: The civil Court, in the light of the pleadings and on a memo filed M/s NSS and some of its partners [excluding Sri. N. Vishwanath], by the impugned order dated 09.01.2019 has directed M/s NSS to deposit a sum of Rs.52,97,111/- along with interest @ 18% per annum subject to the decree. If such amount is deposited, M/s. RBD is called upon to handover the title documents to M/s NSS represented by one of its undisputed partners, Mr. N Venkatesh. The civil Court has also observed that the order shall stand dissolved if M/s NSS or its partners do not comply with the directions to deposit the amount as aforesaid. [b] In O.S. No.5523/2014: The civil Court, by the other impugned order dated 15.02.2021 has directed parties to maintain status quo as regards operating the Firm's current account pending final consideration of such application.
11 5. The litigation between M/s NSS and M/s RBD is checkered and prolonged and it would suffice for the purpose of the decision in these writ petitions to observe that the sale deed executed by M/s NSS in favour of M/s RBD for a certain immovable property is set finally at naught with the decision by the Hon’ble Supreme Court. M/s RBD has filed the suit in O.S. No.2265/1996 for joint and several liability decree as aforesaid for the recovery of the consideration paid under such sale deed. Neither the admitted partners of M/s NSS nor Sri. N. Vishwanath [the plaintiff in OS No. No.5523/2014 and the first respondent in W.P. No.4710/2021 and whose claim as a partner of the firm M/s NSS is contested], dispute the liability to pay sale consideration entirely. While others admit the liability to pay Rs.52,97,111/- but dispute the rate of interest contending that they would be liable to pay only the interest at 6% per annum, Sri. N. Vishwanath [whose claim as a partner of the firm M/s NSS is disputed]
12 contends that the liability is much narrower than the suit claim of Rs.52,97,111/. The controversy between M/s NSS and M/s RBD is over the rate of interest; M/s RBD asserts it is entitled for interest at 18% per annum.
Sri. N. Vishwanath who is the plaintiff in O.S. No.5523/2014 has filed an application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908, to restrain M/s NSS and two others, who are arrayed as the second and third Defendants, from withdrawing any amount from the firm’s Current Account in No.6939001039 with the Indian Bank, Clock Tower Branch, Chennai [referred to as, ‘the Firm’s Current Account’] until the disposal of the suit. The civil Court, by the other impugned order dated 15.02.2021 has directed parties to maintain status quo pending final consideration of such application.
13 7. It must at this stage be observed that this Court in W.P. No.4710/2021, on an application filed on behalf of M/s NSS, has relaxed the rigors of the civil Court’s order dated 15.02.2021 permitting M/s NSS represented by its partner, Sri. N Venkatesh to operate the aforesaid account only for the purposes of discharging M/s NSS’s liability towards taxes and levies. Both Mr. Ashok B. Patil and Ms. Rakshitha D.J submit that after this Court’s order, the Firm’s Current A/c is operated to defray the income tax dues as per the Chartered Accountant's Certificate in that regard.
The learned counsel for the parties submit that insofar as the present petitions, the controversy would be: Whether M/s NSS must be permitted to operate its Current Account in No.6939001039 with the Indian Bank, Clock Tower Branch, Chennai [the Firm’s Current A/c], subject to further adjudication on the rate of interest which is in dispute between the two firms/its partners in
14 OS No.2265/1996 and the pending application in O.S. No.5523/2014, to
[a] Deposit the admitted liability to M/s RBD and [b] Defray the liability towards Municipal Taxes as regards its asset/s.
It is admitted that M/s NSS has received certain amounts in its aforementioned Current Account because it is able to recover possession of its immovable property from a licensee with the Hon’ble Supreme Court finally deciding the dispute between the firm and its licencee and directing the licensee to deliver possession of such immovable properties and on terms requiring the licensee to also pay certain amounts. It is further admitted that proceedings are being pursued on behalf of M/s NSS to recover further amounts.
Mr. Ashok B Patil, on behalf of M/s NSS and all the concerned except Sri. N. Vishwanath, who is
15 represented by Ms. Rakshitha D.J, is categorical that the Firm and others would, in the interest of the M/s NSS’s finances and to avoid recurring interest liability, agree to deposit the amount admitted by them and the undisputed interest forthwith utilizing the amount in the Firm’s Current A/c. In fact, on behalf of M/s NSS, as on the date of the application before this Court in IA No.1/2021 in W.P. No. 6400/2019, the admitted amount with interest at the rate of 6% per annum is computed in a sum of Rs.1,32,42,777/-.
Ms. Rakshitha D.J on behalf of Sri. N. Vishwanath [who asserts that he is also a partner of M/s. NSS but is contested by the other partners], relying upon pleadings in the written statement filed by him, contends that the liability to M/s RBD would only be about Rs.27,30,238/- with interest at the rate of 6% per annum, and the others cannot acquiesce to repay the entire plaint amount disputing only the rate of
16 interest. The learned counsel asserts that would be prejudicial to Sri. N. Vishwanath's defense and interest.
However, the anxieties in this regard are allayed by others who have filed the Memo in O.S. No.2265/1996 for permission to deposit in stating that if it is established by Sri. N. Vishwanath that the liability would be anything less than Rs.57,97,111/-, it would be to their debit as they would be liable for any excess amount paid to M/s RBD. These persons, in view of the assertions in this regard the Memo, cannot renege on this statement and the consequences thereof.
When the controversy as regards the payment to M/s RBD is examined in these circumstances, this Court is of the considered view that there should not be any legal impediment for the firm, M/s NSS represented by its partners, Sri. N. Venkatesh to operate the Firm’s current account to ensure that a
17 sum of Rs.1,32,42,777/- [with further interest at the rate of 6% per annum till the of deposit] is transferred to be in judicial deposit in O.S. No.2265/1996 with liberty to M/s RBD to file an application with the civil Court to withdraw the same subject to the condition that M/s RBD/its authorized representatives shall deposit the title deeds of the property in question with the civil Court. The deposit of the aforesaid amount with future interest must be subject to final decision in O.S. No.5523/2014 as regard the dispute inter se who claim to be the partners of the firm, M/s NSS in the light of the undertaking as aforesaid.
The civil Court is yet seized of the application [I.A. No.3] filed by Sri. N. Vishwanath in O.S. No.5523/2014. Mr. Ashok B Patil submits that the firm, M/s NSS, will have to discharge the municipal tax arrears and subject to the final orders on such application, the firm, M/s NSS may be permitted to
18 make application before the civil Court to utilize the amount in the Firm’s Current Account for that purpose. The assessment of municipal tax arrears would have to be discharged and such discharge would enure to every person who is interested in the firm, M/s NSS and its assets. Therefore, the firm, M/s NSS represented by Sri. N. Vishwanath must have the liberty, subject to the final orders on I.A. No.3, to make necessary application in this regard as and when the occasion arises.
For the foregoing, the writ petitions stand disposed of with answering questions proposed for consideration observing that all contentions inter se parties, except the ones answered herein, are left open to be decided in the corresponding civil suits notwithstanding the observation made in the course of this order or the impugned orders.
19 O R D E R The writ petitions stand disposed of permitting: [i] The Firm, M/s. Narayanaswamy and Sons, represented by its partner Sri. N. Venkatesh, is permitted to operate its Current Account in No.6939001039 with the Indian Bank, Clock Tower Branch, Chennai for deposit of Rs.1,32,42,777/- [with further interest at the rate of 6% per annum till the date of deposit], and to take all necessary such measures as would be necessary to ensure that this amount is deposited, in O.S. No.2265/1996 within three [3] weeks from the date of receipt of a certified copy of this order subject to the terms as mentioned in this order.
[ii] The parties shall be at liberty as served by this Court as regards the
20 adjudication inter se parties in O.S. No.5523/2014 for the deposit now permitted and the leave to file application for payment of municipal tax as also the adjudication in O.S. No.2265/1996.
Sd/-
JUDGE
AN/-