Jaspreet Singh, J
1. Heard Sri C.B. Pandey, learned counsel for the petitioner, learned Standing Counsel for the State-respondents as well as Sri Pritish Kumar, learned counsel for the private respondent no. 3.
2. Since the parties have exchanged the pleadings, accordingly, with the consent of learned counsel for the parties, the matter has been heard finally at the admission stage itself.
3. Under challenge is the order dated 20.09.2022 passed by the DDC, Sitapur by means of which the revision preferred by the private respondent no. 3 has been allowed and after setting aside the order passed by the Settlement Officer of Consolidation Officer dated 16.12.2022 and the order dated 23.01.2021 passed by the Consolidation Officer, the matter has been remanded for decision afresh. It is this order of remand which is under challenge in the instant petition.
4. Sri C.B. Pandey, learned counsel for the petitioners assails the impugned order of remand passed by the DDC, Sitapur, primarily on two grounds:-
(i) That the matter was concluded by findings of fact which were duly recorded by the Consolidation Officer and the Settlement Officer of Consolidation and there was no material before the DDC to have taken a contrary view and even otherwise the DDC erred in setting aside the orders and remanding the matter, thereby unsettling a position which had been settled after decades of litigation.
(ii) It is also urged that the DDC, Sitapur committed an error in remanding the matter especially when being the highest court in the hierarchy of Consolidation Court and having powers to appraise both the findings of fact and law, it could have decided the matter itself rather than remanding the matter and too on account of insufficient reasons as a result, the orders passed by the C.O. and the SOC respectively have been set aside resulting in sheer miscarriage of justice. The DDC further failed to notice that the respondent no. 3 admittedly could not establish its nexus with the firm which was the recorded owner of the property in dispute as well as the fact that the petitioners being the successor-in-interest of the legal heirs of the original deceased partner and the property having vested in them which has been unsettled by the order of remand which is bad in the eyes of law.
5. Elaborating his submissions, Sri C.B. Pandey, has submitted that the dispute in question relates to Khata No. 46, 124 and 125 comprising of several plots situate in Village Jamaitpur, Pargana Khairabad, Tehsil and District Sitapur which was recorded in the name of Firm Ghannumal Bhagwan Das, Sitapur.
6. It is the case of the petitioners that an unregistered firm under the name and style of Ghannumal Bhagwan Das was constituted on 15.01.1950. Both Ghannumal and Bhagwan Das belonged to the same family and a family tree has also been brought on record and indicated in paragraph 14 of the writ petition to indicate that Ghannumal and Bhagwan Das were related to each other as uncle and nephew respectively. (Bhagwan Das was the son of Bandhanmal who was the real brother of Ghannumal).
7. The said firm Ghannumal Bhagwan Das, Sitapur had the following partners namely Seth Ghannumal, Seth Bhagwan Das, Sri Hasanand and Sri Warandmal. It is also the case of the petitioners that Ghannumal and Bhagwan Das were working partners while Sri Hasanand and Warandmal were sleeping partners.
8. As per the deed dated 15.01.1950 placed on record as Annexure No. 4, it would indicate that Ghannumal had a 12.5% share in the said partnership, Sri Bhagwan Das and Hasanand had a share of 31.25% each and Sri Warandmal had a share of 25%.
9. It is also the case of the petitioners that the aforesaid firm namely Ghannumal Bhagwan Das, Sitapur was primarily engaged in Railway contracts to be carried out in different districts of Uttar Pradesh and it also established a brick kiln in Sitapur as part of its business. It has specifically been pleaded that amongst various properties purchased by the firm, the said firm purchased agricultural land by way of different sale deeds in village Jamaitpur, Pargana Khairabad, Tehsil and District Sitapur relating to Khata No. 125 over which the brick kiln was established as indicated in paragraph 7 of the writ petition whereas the other land which comprise of Khata no. 46 was purchased during the lifetime of Ghannumal by the said firm. After purchase of the aforesaid land by the firm, the mutation was also carried out in the revenue records in favour of Ghannumal Bhagwan Das, Sitapur.
10. Sri Ghannumal is said to have executed a will on 21.10.1964 whereby he had bequeathed his entire properties/assets in favour of his sons, grand sons and his wife as per details given in his will (Annexure No. 8 with the writ petition). It has further been pleaded on behalf of the petitioner that upon the death of Sri Ghannumal on 23.10.1964, the firm M/s Ghannumal Bhagwan Das, Sitapur was re-constituted on 24.10.1964 to carry on the business with the remaining three partners.
11. It is further urged that the share of the Ghannumal in the partnership namely Ghannumal Bhagwan Das, Sitapur remained intact and invested in the re-constituted firm itself. Subsequently, the re-constituted firm namely M/s Ghannumal Bhagwan Das, Sitapur was duly registered on 19.03.1965 with the remaining three partners namely Bhagwan Das, Hasanand and Warandmal to carry on the same business as was being conducted prior to the death of Sri Ghannumal.
12. It is also specifically pleaded on behalf of the petitioners that the firm namely M/s Ghannumal Bhagwan Das, Sitapur which was initially constituted in the year 1950, as mentioned above, was dissolved in the year 1972 and an intimation of the said dissolution was also communicated to the Sales Tax Officer, Sitapur on 01.11.1972.
13. It is also urged that since Sri Ghannumal and Bhagwan Das belonged to the same family being related as uncle and nephew, hence, upon the dissolution of the firm M/s Ghannumal Bhagwan Das, Sitapur in the year 1972, the properties of the firm situate in Village Jamaitpur, which is the disputed land in question fell in the share of Seth Ghannumal, accordingly, upon dissolution the said properties were inherited by the sons of Sri Ghannumal namely Daya Singh, Hashmat Rai and Hari Lal.
14. The three sons of Ghannumal thereafter constituted a new firm on 01.11.1972 with the assets inherited by them upon the dissolution of the erstwhile firm namely Ghannumal & Sons. Even this firm M/s Ghannumal & Sons was dissolved w.e.f. 31.10.1975 and the assets of the aforesaid firm Ghannumal & Sons were partitioned between the three partners (the three sons of Ghannumal) of the firm Ghannumal & Sons.
15. The eldest son of Ghannumal namely Daya Singh formed another firm namely M/s Daya Singh Bedi to run the brick kiln business situate on the land of the village Jamaitpur. In terms of the will executed by Sri Ghannumal, the residential house situate in Sitapur was inherited by the grand son of Sri Ghannumal namely Sri Dilip Kumar.
16. It is also the case of the petitioners that the private respondent no. 3 was merely a Manager/Munshi who was appointed by the Firm to look after the brick kiln business. Even after the dissolution of the firm M/s Ghannumal & Sons, the said business of brick kiln was taken over by the firm M/s Daya Singh Bedi and Sri Uttam Chand i.e. the respondent no. 3 continued to act as the Manager to look after the business of brick kiln. Reliance has been placed upon various documents and receipts/license to indicate that the property in question continued to be in possession of the family members of Sri Ghannumal, namely Sri Dilip Kumar (grandson of Ghannumal) son of Sri Daya Singh.
17. It has also been pointed out that Sri Uttam Chand, the respondent no. 3 instituted a suit staking claim on the property by filing a suit under Section 229-B of the Uttar Pradesh Zamindari Abolition and Land Reforms Act claiming rights only in respect of Gata No. 334, 329 and 244 which were plots of Khata No. 44 only, however, the said suit came to be dismissed in default on 09.02.1983. Though, an application for recall/restoration was moved which was allowed, thereafter the consolidation operations started in the village Jamaitpur, Pargana Khairabad, District Sitapur and the proceedings abated but nevertheless the fact remains that this act of Sri Uttam Channd was nothing but an attempt to usurp the properties belonging to the firm M/s Ghannumal Bhagwan Das, Sitapur which after dissolution fell in the share of the legal heirs of Sri Ghannumal and in any case Sri Uttam Chand had no right, title or interest therein.
18. It is further urged that upon the commencement of consolidation operations, objections were filed by Sri Uttam Chand and the issue was raised by Sri Uttam Chand claiming himself to be a partner of a firm namely M/s Ghannumal Bhagwan Das Contractors, Gonda and M/s Ghannumal Bhagwan Das, Lucknow and claiming right to the property of Gata No. 329, 244, 344, 332 and 315. It is also urged that the respondent no. 3 has been taking a vacillating stand at various stages of the litigation.
19. The Consolidation Officer had upon the exchange of pleadings framed as many as seven issues and after meticulously considering the evidence led by the respective parties, recorded findings that upon the dissolution of the firm namely Ghannumal Bhagwan Das, Sitapur, a family settlement took place in the year 1975 in terms whereof the properties in question fell in the share of the petitioners and Sri Uttam Chand had no stake. It was also held that since after the death of Ghannumal, the firm being a family firm, hence, in terms of the family settlement, the properties fell in the share of the respective parties who were the heirs of Sri Ghannumal and moreover they have been in possession. As far as the private respondent no. 3 is concerned, he could not establish his rights over the property in question or to indicate how he had any connection with the erstwhile firm namely M/s Ghannumal Bhagwan Das, Sitapur which was constituted in the year 1950 and had purchased the property in question and was dissolved in the year 1972, hence, the objections of Sri Uttam Chand was rejected and the property rights were decided in favour of the present petitioners by means of the judgment passed by the Consolidation Officer dated 23.01.2021.
20. Upon the appeal preferred by Sri Uttam Chand, the Settlement Officer of Consolidation, Sitapur by means of judgment dated 16.12.2021 dismissed the appeal of the private respondent no. 3 and affirmed the findings of the Consolidation Officer.
21. Against the aforesaid two judgments dated 23.01.2021 passed by the Consolidation Officer as well as the order dated 16.12.2021 passed by the Settlement Officer of Consolidation, the private respondent no. 3 preferred a revision before the DDC, Sitapur which by means of the impugned order dated 20.9.2022 has been allowed and the matter has been remanded and the same is not in sound exercise of jurisdiction for the grounds already noticed in para 4 of this judgment.
22. The learned counsel for the petitioner has relied upon the decision of the Apex Court in the case of Kale Vs. Deputy Director of Consolidation reported in (1976) (2) ALR 173 and Gopi Nath Vs. Satish Chandra reported in AIR 1964 Alld. 53
23. Sri Pritish Kumar, learned counsel for the private respondent no. 3 while making his submissions has submitted that the entire premise upon which the Consolidation Officer as well as the Settlement Officer of Consolidation has proceeded is quite erroneous. It is urged that the Consolidation Officer and the Settlement Officer of Consolidation lost sight of the fact that once it is the admitted case of the parties that the property in question belonged to the firm namely M/s Ghannumal Bhagwan Das, Sitapur which was dissolved in the year 1972 and the subsequent developments which took place have not been taken note of or appreciated in the correct legal perspective, ignoring the provisions of the Partnership Act which was essentially applicable and this has resulted in an incongruous result.
24. Elaborating his submissions, it is urged by learned counsel for the respondent no. 3 that there is a distinction between the private assets of an individual and assets of a firm. Upon the dissolution of a firm, the rights of the deceased partner is confined only to the value of his share in the firm and cannot be ascribed to any particular asset of the firm and is subject to the profit/loss sharing ratio.
25. It is also urged that Sections 14, 42(c), 46 and 37 of the Partnership Act, 1932 are vital to understand and to be followed while dealing with the assets of a firm and its distribution amongst its partners which has not been noticed by the two authorities i.e. the Consolidation Officer and the Settlement Officer of Consolidation while the Deputy Director of Consolidation has clearly noticed the distinction between the private assets of an individual and rights and assets of a partner in a firm and finding that this aspect has not been taken note of by the two authorities has rightly remanded the matter as in absence of proper appreciations of the evidence and legal provisions, the conclusions as arrived at by the two Consolidation Authorities are erroneous, hence, the DDC was absolutely justified in remanding the matter.
26. The learned counsel for the respondent no. 3 has also submitted that on the perusal of the given facts and the admitted case of the petitioners, it is urged that it is incorrect to state that the firm M/s Ghannumal Bhagwan Das, Sitapur which was originally constituted in the year 1950 was a family firm. From the perusal of the partnership deed as filed by the petitioners, it would indicate that Sri Ghannumal had only 12.5% share rather the major shareholders were Sri Bhagwan Das, Sri Hasanand and Sri Warandmal. Even from the perusal of the pedigree as mentioned by the petitioners in paragraph 14 of the writ petition, it would indicate that Warandmal and Hasanand were not part of the family of Ghannumal. Sri Warandmal and Hasanand were outsiders to the family and they together held 56.25% i.e. the majority share in the said firm.
27. It is further elaborated that upon the dissolution of the firm M/s Ghannumal Bhagwan Das, Sitapur in the year 1972. Even if the share of Ghannumal remained intact and invested in the firm then at best the share of Ghannumal was confined to the extent and value of the invested amount in the firm which was re-constituted in the year 1964 till such time it was dissolved in the year 1972. However, even the existing partners, at the time when the firm was dissolved in the year 1972, could not claim any specific share on any particular asset. Admittedly, on the date of death Sri Ghannumal, his legal heirs were never inducted in the re-constituted partnership from 1964 to 1972 when it was dissolved and if at all, there was any claim, the legal heirs could have filed the suit against the value of the share of Ghannumal and could not claim a right over any particular asset of the firm claiming it to be their own.
28. It is further urged that in October, 1964 after the death of Sri Ghannumal, another firm M/s Ghannumal Bhagwan Das Contractors, Gonda was constituted with Sri Bhagwan Das, Panjumal, Uttam Chand (respondent no. 3) and Sri Parasram as the partners of the said firm. The attention of the Court has been drawn to the said deed which has been brought on record as Annexure No. CA-1 to the counter affidavit filed by the respondent no. 3 to state that upon the constitution of the said firm, it was clearly stated that all the railway contracts, assets and liabilities and outstanding works of the firm namley M/s Ghannumal Bhagwan Das, Sitapur shall be taken over by M/s Ghannumal Bhagwan Das, Gonda.
29. It is further stated that again a partnership deed was executed between Bhagwan Das. Sri Uttam Chand (respondent no. 3), Sri Hashmat Rai and Sri Ghanshyam Das. This firm was known as "Ghannumal Bhagwan Das, Lucknow and the said deed also clearly indicated that the firm M/s Ghannumal Bhagwan Das, Sitapur and M/s Ghannumal Bhagwan Das, Gonda are being taken over by this new firm M/s Ghannumal Bhagwan Das, Lucknow. This firm also came into being in the year 1966 wherein Sri Uttam Chand, i.e. the respondent no. 3 was a partner alongwith Sri Bhagwan Das and Sri Hashmat Rai. In the firm M/s Ghannumal Bhagwan Das, Lucknow which came into being in the year 1966, Hashmat Rai was none other than the son of Sri Ghannumal who was a partner in his HUF capacity.
30. The contention is that a deed of partnership is nothing but a contract entered between the parties. Sri Bhagwan Das was a common partner in the firm which was constituted in the year 1950 also in the firm M/s Ghannumal Bhagwan Das, Gonda which came into existence in October, 1964 after the death of Ghannumal so also in the firm M/s Ghannumal Bhagwan Das, Lucknow which came into effect in November, 1966 which had taken over the business of the firm M/s Ghannumal Bhagwan Das, Gonda and M/s Ghannumal Bhagwan Das, Sitapur.
31. It is further submitted that upon a dissolution of a firm, a deed of dissolution is to be prepared in terms whereof the rights and liabilities of the partners is settled after paying of all the debts and outstanding of the firm. It is only thereafter that the surplus is divided amongst the partners and only partners themselves. In the instant case, the heirs of Ghannumal were never inducted in the partnership after the death of Sri Ghannumal in the year 1964, consequently, the theory as propounded by the petitioners that after the firm M/s Ghannumal Bhagwan Das, Sitapur which was re-constituted in the year 1964 with only three partners and which was dissolved in the year 1972 and upon the said dissolution, the heirs of Ghannumal got the property in question as their share equivalent to that sum invested upon the death of Ghannumal does not have any legal binding stand.
32. At best the petitioner could only get a share to the extent of the value of the share in the firm and not any particular asset representing the said share. Even otherwise, if at all, any particular asset was ascribed to the heirs of Sri Ghannumal as representing their share then the same could only be done by an appropriate deed duly stamped and registered as the heirs of the Sri Ghannumal admittedly were not partners after the death of Sri Ghannumal and they only had a right claiming the money value of the share of Ghannumal invested in the firm. In absence of any proper deed of conveyance or transfer, the theory that the assets of the firm came in the hands of heirs of Ghannumal on the basis of a family settlement is contrary to the legal provisions and no such family settlement could have been arrived at, especially, when it is clear that the firm M/s Ghannumal Bhagwan Das, Sitapur even as constituted in the year 1950 was not a family firm where Ghannumal had only a minor share of 12.5% and the larger share of 56.25 % were held by the outsiders namely Sri Hasanand and Sri Warandmal.
33. The further submission of learned counsel for the respondent no. 3 is that in absence of any proper deed, the heirs of Ghannumal could not claim a right over the particular asset of the firm and moreover from the will as has been placed on record by the petitioners, it would indicate that Sri Ghannumal himself admitted that he had not put in any particular immovable asset rather his money was invested in the firm. Any investment in the firm representing the share of Sri Ghannumal is to be treated in terms of money value and not in terms of any particular and specific asset/immovable property.
34. In the aforesaid circumstances in absence of any proper deed duly stamped and registered no rights could be created in favour of any third party who was not a partner and what is going to be its effect in law after applying the principles as well as the provisions contained in the Partnership Act the matter required re-consideration and for the said reasons, the matter has been remanded and there is no error of jurisdiction committed by the DDC, accordingly, the writ petition deserves to be dismissed.
35. The learned counsel for the private respondents has also filed his brief submissions and in support of his contentions has relied upon a decision of the Apex Court in the case of Controller of Estate Duty, Gujarat, Ahmedabad Vs. Mrudula (Smt.) Naresh Chandra reported in AIR 1986 SC 1821.
36. The Court has carefully considered the rival submissions and perused the material on record including the written submissions and the case laws cited by the respective parties.
37. At the outset, it may be noticed that partnership is nothing but a form of the contract. A Partnership Firm may be constituted by members of a family or even by such persons who may not be related but the fact remains that in either situation the rights and obligations of the respective partners is confined to the rights and obligations as provided in the partnership deed subject to the provisions of the Indian Partnership Act, 1932.
38. Upon perusal of the judgments passed by the Consolidation Officer and the Settlement Officer of Consolidation, it would indicate that both the said Authorities have based their conclusions on the premise that the firm M/s Ghannumal Bhagwan Das, Sitapur as constituted in the year 1950 was a family firm and upon the dissolution in the year 1972 in terms of a family settlement, the assets of the said firm came to be distributed amongst the legal heirs of Sri Ghannumal and the remaining partners, though no such deed was brought on record.
39. The distinction, between distributions of assets of a firm amongst its partners upon dissolution and transferring certain assets of the firm to a third party (non-partner) for satisfying an obligation or to to settle/satisfy a share demand of a third party is quite real and different. The distribution of an asset of a firm amongst the partners upon dissolution in terms of the Partnership Act may be nothing but re-adjustment for which though deed is drawn but its registration may not be required, however, but if the same is done qua a third party who is not a partner who merely has a claim against the firm then the situation changes as his capacity would be that of a creditor and what benefit may be available to the partners inter se is not available to such third party (creditor) as that would constitute a transfer attracting all its legal requirements. Apparently, even from the material brought on record before this Court, neither any dissolution deed has been brought on record to indicate that how the assets of the firm M/s Ghannumal Bhagwan Das, Sitapur were distributed upon dissolution. In absence of such evidence no clear finding could be recorded.
40. The effect of the fact that Hashmat Rai, one of the sons of the Ghannumal who was a partner in the firm M/s Ghannumal Bhagwan Das, Lucknow which came into being in the year 1966 and that too in his capacity as an HUF wherein Sri Bhagwan Das was also a partner with Uttam Chand, the respondent no. 3 herein and in the said deed there is a clear recital that all the assets and liabilities of the firm M/s Ghannumal Bhagwan Das, Lucknow and M/s Ghannumal Bhagwan Das Contractors, Gonda are being taken over by the said firm. These two deeds of partnership, its legal effect has also not been considered. Whether upon the constitution of these two firms i.e. M/s Ghannumal Bhagwan Das, Lucknow and M/s Ghannumal Bhagwan Das Contractors, Gonda wherein the partners were in their distinct capacities, coupled with the fact even in the will executed by Ghannumal, the share of Ghannumal as invested in the firm have not been specifically bequeathed to the present petitioners or their predecessors-in-interest and there is nothing on record before this Court to show that how the present petitioners alone are claiming right even though Sri Ghannumal expired in the 1974 and in the year 1966 one of his sons namely Hashmat Rai was included in the firm M/s Ghannumal Bhagwan Das, Lucknow as an HUF and upon the dissolution of the firm in the year 1972 how the assets of the firm M/s Ghannumal Bhagwan Das, Lucknow could have been distributed amongst the heirs of Ghannumal contrary to the manner in which the ''Will has been devised by the Ghannumal himself are all questions which require consideration. This aspect also was not taken note of by the C.O. and the SOC.
41. In order to arrive at a correct conclusion, the provisions contained in the Partnership Act i.e. Sections 5, 6, 14, 37, 42 to 49 have to be taken note in context with the evidence relating to the different partnership firms constituted from time to time and their respective dissolution. Since none of the two authorities i.e. Consolidation Officer and the Settlement Officer of Consolidation had taken a look at the problem with the correct lens of the legal provisions and this aspect has attracted the attention of the DDC who after noticing the same found that the matter required a re-look and for the said purpose it has remanded the matter.
42. In so far as the decision cited by the learned counsel for the petitioner in the case of Kale Vs. DDC (Supra) is concerned, the proposition is very well settled to be disputed, however, what needs to be noticed is whether the principles as laid down by the Apex Court in the case of Kale (supra) has got any applicability in the instant case. Needless to say that a family settlement can be arrived at between the family members who have any pre-existing rights. Whether the said principles can be extended to a partnership firm which comprises of family and non-family members as in the instant case and the non-family members are having a larger share is to be considered.
43. Even in the case of Chandra Kumari Vs. DDC (supra), the applicability of the proposition in the instant case is to be considered.
44. Similarly, the decision cited by the learned counsel for the respondent in the case of Mridula Naresh Chandra (supra) whether it would apply in the given facts will naturally have to be tested in the given fact situation.
45. As already noticed above that this aspect relating to the rights of the parties which flow from a partnership firm, rights of a party which they inherit as members of a family. It also has to be seen that admittedly where Sri Ghannumal had executed a will and had devised his property in terms of the said will, then whether, while the said will subsists a family settlement can be taken note of and what would be its validity also is a point to be considered. These intricate questions are interweaved with the facts which have not been considered either by the Consolidation Officer or by the Settlement Officer of Consolidation.
46. It may be true that the DDC is the final Court of fact and law in but in the present case where the matter has proceeded upon a tangent and ignoring the principles as attracted to the dispute in question de-hors the provisions of the Partnership Act and the parties have also not brought on record the requisite evidence which could support the respective contentions, hence, this Court is of the clear view that it cannot be said that the order of remand is bad in the given circumstance.
47. In the instant case, the matter does require a re-look and in the aforesaid circumstances this Court is satisfied that the order dated 20.09.2022 passed by the Deputy Director of Consolidation remanding the matter for decision afresh does not suffer from any error.
48. The fact that the parties have been litigating since long may not be the only reason for this Court to intervene as the questions which are involved have not been looked into by the Courts below, hence, in the aforesaid circumstances, the remand was the only option and thus taking care of the apprehension that the parties have been litigating since several years, this aspect can be taken care by directing the parties to appear before the Consolidation Officer concerned on 05.01.2023 and the parties shall be entitled to file any additional evidence they wish to file in support of their contentions in light of the issues raised before the Court within a period of three weeks of putting their appearance and thereafter the matter be decided by fixing dates on weekly basis within a further period of four weeks by affording a reasonable opportunity of hearing to the parties but without granting any unnecessary adjournments on any ground except in exceptional circumstances.
49. It is made clear that any observations by this Court may not be treated as an expression of opinion on merits but was for the limited purpose to assess the respective contentions of the parties in juxtaposition to test the order of remand passed by the Deputy Director of Conosolidation, hence, the Court of Consolidation Officer shall be free to decide the controversy on its own merits, in light of the issues and observations noticed in this judgment and on the basis of the evidence on record strictly, in accordance with law.
50. Keeping the order dated 20.09.2022 intact subject to the directions and observations as noted above, the petition is dismissed. In the facts and circumstances, there shall be no order as to costs.
