The legal case involving Annapurneshwari Cotton Co. and the complainant has been a subject of contention over the years. The complainant sought premature payment from the firm, leading to a dispute that was initially resolved by the DCDRF and then further contested. The case delves into the complex issues of partnership deeds, inheritance, and the nature of commercial transactions. Stay tuned to unravel the intricacies of this legal battle.
Facts
- The complainant invested Rs. 5 lakhs in the partnership firm M/s Annapurneshwari Cotton Co. on 21.05.2002.
- He sought premature payment which was denied, with the agreement that it would be paid upon maturity.
- The appellants contended that the complainant was a partner in the firm as per the registered deed dated 27.05.1996.
- The DCDRF allowed the complaint and awarded relief to the complainant.
- The surviving partners were the husband of appellant No.1 and father of appellant Nos.2 to 4.
- The DCDRF initially allowed the complaint and directed the OP Nos.1 to 5 to pay a sum of Rs.5 lakhs with 18% interest per annum from 21.05.2002 to 20.05.2012, and then with 9% interest per annum until realization.
- This initial order was set aside due to the denial of opportunity to the opposite parties, and the matter was sent back for a fresh decision.
- Subsequently, on 29.04.2016, the DCDRF once again allowed the complaint with the same terms as the previous order.
- An appeal was made to the SCDRC, Bangalore, which in 2019 allowed the appeal and remanded the matter back to the DCDRF to reconsider the issue of the complaint’s maintainability.
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Arguments
- Legal heirs of the deceased partner of a registered firm cannot be impleaded as opposite parties in a complaint for recovery or liability of the firm.
- The DCDRF, SCDRC, and NCDRC allegedly committed serious errors of law in entertaining and allowing the complaint.
- The dispute being commercial in nature should have been addressed in a Civil Court rather than through a complaint under the 1986 Act.
Analysis
- The contention regarding the registered partnership deed dated 27.05.1996 is not valid due to the existence of an intervening unregistered partnership of 13.09.1994.
- The appellants’ refusal to return the invested amount despite legal notice amounts to deficiency in service, making the complaint maintainable.
- The appellants inherited the estate of the Managing Partner Basavaraj Uppin, making them liable for the payment due to Original Name.
- The registered partnership deed dated 27.05.1996 continued until the investment was made on 21.05.2002, making Original Name a partner of the firm.
- The status of the firm ceased or dissolved upon the death of the Managing Partner Basavaraj Uppin in March 2003.
- The investment made by Original Name was for profit/gain at 18% interest per annum, making it a commercial transaction outside the purview of the 1986 Act.
- Commercial disputes cannot be decided under the 1986 Act; the appropriate remedy for recovery would be before the Civil Court.
- The complaint was deemed not maintainable due to the above reasons.
- Remedy of Article 226 of the Constitution available before the High Court for an aggrieved party if NCDRC decides an appeal or revision.
- No remedy available under Article 226 if it was an original complaint before the NCDRC.
- No evidence of a fresh partnership deed reconstituting the firm with the present appellants as partners
- Legal heirs of a deceased partner not liable for firm’s liabilities
- No directions in Universal Sompo General Insurance case for pending matters to be dismissed or transferred to High Court
- Universal Sompo General Insurance case to apply prospectively for fresh matters
- District Forum, State and National Commissions erred in allowing and upholding the complaint
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Decision
- Orders of the complaint being set aside
- Dismissal of the complaint
- Option provided to the complainant to seek alternative remedies before a Competent Forum
- Appeal allowed
Case Title: ANNAPURNA B. UPPIN Vs. MALSIDDAPPA (2024 INSC 276)
Case Number: C.A. No.-004729-004729 / 2024
