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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7174 OF 2014 (Arising out of SLP(C) No.9914 of 2012)

BABU LAL & ORS.      … APPELLANTS

VERSUS

M/S VIJAY SOLVEX LTD. & ORS.       … RESPONDENTS

WITH

C.A. NO.7175 OF 2014 (@ SLP(C)No.10363/2012)

C.A. NOs.7195-7201 OF 2014 (@ SLP(C)Nos.18158-18164/2012)

C.A. NO.7177 OF 2014 (@ SLP(C)No.18420/2012)

J U D G M E N T

SUDHANSU JYOTI MUKHOPADHAYA, J.

Leave granted.

2. In  these  appeals  the  appellants  have  challenged  the  

common judgment and order dated 14th March, 2012 passed by the  

High Court of Judicature for Rajasthan, Bench at Jaipur in  

S.B.  Civil  Misc.  Appeal  No.  2218  of  2011  etc.   By  the  

impugned judgment, the High Court modified the interim order  

dated 10th February, 2011 passed by the Additional District  

Judge  No.3  Jaipur  Metropolitan  Magistrate,  Jaipur  

(hereinafter referred  to as,  “the Lower Court”)  in  Civil  

Misc. Case No.36/2010, whereby the Lower Court partly allowed

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the application of the appellants-original plaintiffs seeking  

temporary injunction under Order XXXIX Rule 1,2 of CPC. The  

High  Court  set  aside  the  temporary  injunction  granted  in  

favour  of  plaintiffs/appellants  by  the  Lower  Court  and  

confirmed  that  part  of  the  order  requiring  production  of  

audited/unaudited accounts of the companies/partnership firms  

run by the parties.

3. The present appeals arise from the following sequence of  

facts.

Plaintiffs/appellants-Babulal and others filed a suit  

for declaration, mandatory injunction, rendition of accounts  

and  permanent  injunction  against  the  defendants/non-

applicants. The Lower Court noticed that the properties which  

the plaintiffs presented in the Schedules “Ka” to “Cha” are  

basically  immovable  properties,  companies  and  partnership  

firms  regarding  which  both  the  parties  have  claimed  

ownership. Taking into consideration that the dispute between  

the parties has arisen after the year 2007 and the cases are  

pending before the Company Law Board and if a restraint is  

not imposed upon the transfer of the aforesaid properties it  

will lead to multiplicity of litigation and the parties will  

entangle  in  litigation,  the  Lower  Court  observed  that  

plaintiffs/appellants have made out partially a prima facie  

case and held that the issue of balance of convenience and  

irreparable loss are in favour of the plaintiffs/appellants.  

Resultantly, the application of the plaintiffs-appellants for

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temporary  injunction  against  the  non-applicants  and  the  

counter temporary injunction application filed on behalf of  

the non-applicants were partly allowed and it was ordered  

that till the decision of the original suit:-

1. The applicants and non-applicants no.1 to 31 and  

the  non-applicants  no.36  to  43  shall  not  

sell/transfer the immovable properties as mentioned  

in Schedule “Ka” to “Cha” and nor shall they create  

any substantial charge on the said properties.

2. The Companies/Partnership firms controlled and  

run by the parties of which the details have been  

given in Schedule “Ka” to “Cha” regarding them the  

audited  accounts  of  income  and  expenditure  half  

yearly/annually whichever is got done in the normal  

sequence shall be presented before this Court. Apart  

from this the other prayers which have been made by  

both the parties are rejected.

4. The  non-applicants  preferred  different  miscellaneous  

appeals  against  the  aforesaid  interim  order  of  injunction  

before the High Court. The non-applicants-respondents herein  

made the following submissions:

(a) The suit of the plaintiffs in the present form  

is not maintainable in the eyes of law, inasmuch as  

it has been filed by Sh. Babulal along with Saurabh  

Agrotech Pvt. Ltd., which is a company incorporated

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under  the  Companies  Act,  two  partnership  firms  

registered under the Partnership Act jointly and the  

HUF of Babulal, seeking partition of the properties  

mentioned in the Schedules annexed to the plaint and  

that too against the set of companies, which have  

been shown as the assets of the HUF.

(b) Plaintiff-Babulal though seeking partition of  

the joint family properties has not impleaded his  

own sons and other coparceners as parties to the  

suit and has not included the properties owned and  

managed by the plaintiffs in the schedules annexed  

to the plaint. Therefore, it was argued that the  

suit  itself  is  bad  for  non-joinder  of  necessary  

parties and of causes of action and the suit is not  

tenable in the eye of law.

(c) The  Lower  Court  failed  to  consider  the  

contentions raised by the concerned defendants and  

also the documents produced by them.  

5. On the other hand, learned counsel for the plaintiffs-

appellants made the following submissions:

(a) The Lower Court has passed the impugned order  

which is just and proper after considering the prima  

facie case, irreparable injuries likely to be caused  

to the plaintiffs and the balance of convenience.  

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(b) On 20th December, 2007, a family settlement has  

taken place between Niranjan Lal Data Group which  

belong to the defendants and Babu Lal Data Group  

which belong to the plaintiffs and that the said  

settlement was signed by Mr. Vijay Data for Niranjan  

Lal Data Group and by Babu Lal Data for Babu Lal  

Data  Group.  The  said  settlement  was  also  partly  

acted upon by the defendant-Niranjan Lal and other  

coparceners and therefore, they cannot be permitted  

to back out from the said settlement.   

Learned counsel also placed reliance upon decisions of  

this Court in  Reliance Natural Resources Ltd. v. Reliance  

Industries Ltd. (2010) 7 SCC 1 and in the case of  Sangram  

Singh  P. Gaekwad  and  others  v. Shantadevi  P. Gaekwad  (D)  

Through LRs. & Ors. (2005) 11 SCC 314  and submitted that  

though a company incorporated under the Companies Act is a  

body corporate, in certain situations, its corporate veil can  

be lifted and that the suit for partition could be filed  

against companies also.

It was further contended on behalf of the plaintiffs-

appellants that the family settlement need not be signed by  

coparceners  and  that  if  a  mere  memorandum  of  family  

arrangement was prepared with regard to the arrangement which  

had already taken place; such a document did not require  

registration. The family settlement made by the parties bona

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fide by making fair and equitable division of the properties  

amongst various members of the family must be respected.  

6. The High Court by impugned judgment and order dated 14th  

March, 2012 observed as follows:

”6………It  is  also  significant  to  note  that  the  plaintiffs have impleaded the companies, partnership  firms and proprietary concerns and HUFs as the party  defendants, and the said companies and firms have  also been shown as the properties or the assets of  the HUF in the schedule 'Gha' annexed to the plaint.  This  court  fails  to  understand  as  to  how  the  companies which are incorporated under the Companies  Act having perpetual seal and separate entity could  be  the  assets  of  the  HUF  as  alleged  by  the  plaintiffs  and  as  to how  the  companies  could  be  divided by metes and bounds by way of partition as  prayed for in the suit. The plaintiffs in the suit  have also prayed for mandatory injunction seeking  direction against the defendant-companies alongwith  other defendants to act upon the family settlement,  alleged to have taken place on 20.12.2007 between  the Niranjan Lal Data Group and Babu Lal Data Group,  and have also sought the direction against the said  companies to execute the documents and handover the  possession of the properties of the said companies  and firms etc. This court also fails to understand  as to how the alleged family settlement between the  NLD Group and BLD Group would be binding to the  defendant companies and firms, apart from the issue  as to whether the alleged document dated 20.12.2007  could  be  called  a  family  settlement.  Under  the  circumstances this court finds much substance in the  submission  made  by  the  learned  counsel  for  the  appellants that the suit filed by the plaintiffs is  not  only  bad  for  mis-joinder  of  parties  and  of  causes  of  action,  but  also  for  non-joinder  of  necessary parties and that the suit in the present  form would not be maintainable in the eye of law.  

7. So far as merits of the case are concerned,  according  to  the  respondents-plaintiffs,  all  the  properties mentioned in the Schedules 'Ka' to 'Chha'  annexed  to  the  plaint,  were  purchased  from  the  nucleus of the joint family properties, and as per  the  family  settlement  dated  20.12.07,  the  said  properties were required to be divided amongst the  family  members  of  the  plaintiff  No.  1  and  the

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defendant  Nos.1  to  9.  In  this  regard,  it  is  pertinent  to  note  that  the  entire  suit  of  the  plaintiffs  is  based  on  the  so-called  family  settlement which had allegedly taken place between  the NLD group and BLD group on 20.12.07. From the  bare perusal of the said document it transpires that  it  is  the  minutes  of  the  meeting  of  Data  Group  Family dated 20.12.07, which was signed by Mr. Vijay  Data for NLD Group and Mr. Babu Lal Data for BLD  Group.  Apart  from  the  fact  that  there  is  not  a  whisper in the said document that the corpus of the  companies  mentioned  in  the  said  document  was  provided by the HUF or that the other properties  mentioned  in  the  said  document  were  the  HUF  properties,  the  said  document  has  also  not  been  signed by the other coparceners of the alleged HUF  except by Mr. Vijay Data and Mr. Babu Lal Data. Such  a document by no stretch of imagination could be  said to be a family settlement. However, even if it  is believed to be a family settlement, and even if  it is held that the same was not required to be  signed by all the coparceners, then also there is  nothing  on  the  record  to  suggest  that  it  was  a  memorandum  prepared  after  the  family  arrangement  which had already been made earlier, not required to  be registered. ………….

“9. In this regard it is pertinent to note that  though  the  concerned  defendants  had  raised  contentious issues as regards the maintainability of  the suit, mis-joinder of parties and of causes of  action,  suppression  of  material  facts  by  the  plaintiffs etc., the lower court has not considered  the  same  and  has  held  that  the  plaintiffs  had  established the prima facie case in their favour. In  the opinion of this court such a finding of the  lower  court  in  the  impugned  order  is  not  only  erroneous but also perverse. When the suit on the  face of it suffered from the mis-joinder of parties  and of causes of action and was not prima facie  tenable  in  the  eye  of  law,  the  lower  court  has  committed serious error of law and facts in holding  that the plaintiffs had established a prima facie  case. If the plaintiffs were not entitled to the  final reliefs in the suit, they could not be granted  temporary  injunction  as  prayed  for  during  the  pendency of the suit.”

7. We have heard learned counsel for the parties and have  

perused the record.  In the present case, the parties have

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raised similar pleas which were taken before the High Court.  

However, we are of the opinion that while dealing with a  

matter  relating  to  vacation  of  order  of  temporary  

injunction, it was not open for the High Court to give a  

finding on the main issue relating to maintainability of the  

suit and the family settlement reached between the parties.

8. In view of the finding aforesaid, we are inclined to  

interfere with the judgment and order dated 14th March, 2012  

passed by the High Court of Judicature for Rajasthan, Bench  

at Jaipur in S.B. Civil Misc. Appeal No.2218 of 2011 etc. We,  

accordingly, set aside the impugned judgment and remit back  

the matter to the High Court for its fresh disposal  after  

hearing the parties.  

9. The  appeals  stand  disposed  of  with  aforesaid  

observations.  

……………………………………………………………………………J.                    (SUDHANSU JYOTI MUKHOPADHAYA)

…………………………………………………………………………J.                  (S.A.BOBDE)

NEW DELHI, August 4, 2014.