Municipal Councul,Shivpuri & Anr. vs M/S.Jai Bharat Automobiles

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IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE ASHISH SHROTI
SECOND APPEAL No.18 of 2003
MUNICIPAL COUNCIL, SHIVPURI & ANOTHER
Versus
M/S. JAI BHARAT AUTOMOBILES
Appearance:
Shri J.D. Suryawanshi- learned Senior counsel assisted by Shri
Kunal Suryavanshi – learned counsel for the appellants.
Shri Anand Vinod Bhardwaj- learned counsel and Shri Anand
Raghuwanshi- learned counsel for the respondent.
Reserved on : 19/08/2026
Delivered on : 01/09/2026
JUDGMENT
1. The appellants/defendants have filed this appeal challenging
judgment and decree dated 01/10/2002 passed by the Second
Additional District Judge, Shivpuri in Civil Appeal No.11-A/2002,
whereby the judgment and decree dated 11/01/2002 passed by the Civil
Judge, Class-1, Shivpuri in Civil Suit No.32-A/1999 has been affirmed
and the suit for declaration and permanent injunction filed by the
respondent/plaintiff has been decreed.
2 . For purposes of convenience, the respondent shall be referred to
as the plaintiff-firm while the appellants shall be referred to as the
defendants as per their respective status in the civil suit. Further, the
suit property would mean the land situated at Block No.1, 2, 3 & 4 each

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ad-measuring 170 x 80 sq. feet at Agra - Bombay Road, Shivpuri. It be
noted that there is no dispute with regard to identity of the suit property
between the parties.
Plaintiff’s Case :
3 . The plaintiff filed the present the suit inter-alia on the ground
that vide lease deed 23/07/1960, the suit land was leased out for a
period of 25 years on premium of Rs.4472/- and annual lease rent of
Rs.279.50. It averred that as per Clause 1 of lease deed, the firm was
required to apply for renewal of the lease within six months before
expiry of lease period and if the application is made subsequent to
expiry of the lease, the defendants' Municipal Council was entitled to
charge lease rent at double rate. It further provides that after expiry of
initial period, the lease can be extended for a period of ten years which
may extend to maximum 99 years.
4 . It is the case of the plaintiff that it applied for renewal of lease on
07/11/1984 well within time. The application was sent by registered
post which was received in the office of defendant no.2 vide Inward
No.2237 on 12/11/1984. The plaintiff claims that its representative
regularly contacted the defendants who was told that relevant file is
missing. It is also averred that on the demand of the Council, the
plaintiff-firm deposited lease rent for the period of 1984-85 & 1985-86
on 22/12/1985. The plaintiff's case is that upon deposit of the lease rent,
the lease automatically stood renewed. As per its case, the defendants
assured the plaintiff that the certificate of renewal of lease shall be sent
to the plaintiff.
5 . The plaintiff has further averred that on 22/10/1988, a reminder

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was sent for issuing renewal certificate and further the plaintiff
deposited annual lease rent for 1986-87, 1987-88 & 1988-89 vide bank
draft. Still the defendants did not provide the certificate of renewal of
the lease. The plaintiff thereafter served a legal notice on 24/09/1989.
The plaintiff has also averred that it deposited property tax regularly
which was received by the defendant Council. Further, it sent lease rent
for the year 1989-90 to 1991-92 on 14/08/1992.
6 . The plaintiff averred that on 05/08/1992, the employees of
defendant Council came to the suit land and started measuring the land
for construction of road. On protest by the plaintiff, they returned back
threatening the plaintiff to come back again with force to take
possession of this suit land. With the aforesaid pleadings, the plaintiff
filed the suit seeking a declaration that it is the owner in possession of
the suit land as a lessee and the lease got automatically renewed for ten
years pursuant to its application dated 07/11/1984 and further that the
plaintiff is entitled to enjoy the property as per its convenience. The
plaintiff also sought for a decree of permanent injunction restraining
the defendants from dispossessing it from the suit land and further from
constructing the road over the land. It also sought a declaration that the
defendants are bound by the terms of lease deed.
Defendants’ case :
7 . The defendants filed their written statement and denied the
plaintiff's claim over the suit land. In substance, it was their case that
pursuant to the application dated 18/09/1959 and the resolution of the
Council dated 07/03/1960, the suit land was leased out to the plaintiff-
firm for a period of 25 years for establishing Motor Service Station and

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Work Shop. It is their case that since the plaintiff failed to comply with
the terms of lease as Pakka construction was raised contrary to the
terms of lease and further the land has been sub-let to various other
persons, therefore, the plaintiff is not entitled to claim benefit of any of
the terms of lease. As per their case, the tenure of lease expired on
03/11/1984 and thereafter, the plaintiff has no right to hold possession
of the suit land.
8 . In paragraph 7 of the written statement, the defendants denied
that the lease was automatically renewed only by sending the
application. It is their case that the lease cannot be renewed without
there being any agreement executed for the said purpose.
9 . Regarding the deposit of lease rent, it is the case of the
defendants that the plaintiff on its own deposited the amount without
seeking any permission from the Council. The defendants also raised an
objection to the maintainability of the suit on the ground that Shri
Chandra Kumar Sancheti alone has no right to file the suit on behalf of
the firm. The defendants alleged that the plaintiff is an encroacher over
the land.
10 . Since the period of ten years was also expiring, the plaintiff
amended the plaint pleading that the application for further extension of
lease from 1995 to 2005 alongwith the demand draft of Rs.2971/- was
sent by the plaintiff on 16/12/1994. However, the defendants asked the
plaintiff to take back the draft from the office respondent no.2 vide
letter dated 21/12/1992. The plaintiff alleged that the acknowledgment
of return of demand draft was forcibly taken from plaintiff's
representative whereas it never intended to take it back.

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Trial Court & First Appellate Court Judgments :
11 . Learned trial Court vide judgment and decree dated 11/01/2002
decreed the suit for declaration while for decree of permanent
injunction, it was decreed partly. Learned trial Court held that the land
was given on lease to the plaintiff and the allegation of sub-letting and
Pakka construction by the plaintiff is not established. As per the
findings, the lease did not expire on 03/11/1984 and got automatically
renewed on plaintiff's depositing annual lease rent. The plaintiff was,
thus, held entitled for extended period of lease. The prayer for
permanent injunction was, however, declined to the extent of
restraining the defendants from constructing road over the suit land.
The decree for permanent injunction was granted restraining the
defendants from interfering with the plaintiff's possession over the suit
land. The appeal filed by the defendants has also suffered dismissal
vide impugned judgment and decree dated 01/10/2002 and accordingly,
the defendants are before this Court in the present appeal.
Substantial Questions of Law Framed by this Court :
12 . This Court vide order dated 31/03/2004 admitted the appeal on
the following substantial question of law:
“Whether the rent deposited on court after cancellation of the
lease-deed will amount to renewal of leased?”
13 . Thereafter, the following additional substantial questions of law
were framed by this Court on 13/08/2026:
“1. Whether the sole partner, Chandra Kumar Sacheti, of M/s
Jai Bharat Automobile has the right to file the suit?
2. Whether the suit filed by only one partner of the firm is
contrary to the mandatory provisions of Section 69 of the
Partnership Act, 1932? ”

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Regarding Additional Substantial Questions of Law:
14 . Addressing the additional substantial questions of law, learned
senior counsel for the defendants argued that the suit was filed in the
name of plaintiff firm by one of the partner Shri Rajendra Kumar
Sancheti only. As per his submission, under Section 69(2) of the Indian
Partnership Act, 1932 (in short ‘Act of 1932’) as also by virtue of Order
30 Rule 1 CPC, the suit in the name of firm can be filed only by two or
more partners. He, thus, submitted that the suit was not maintainable at
the instance of Shri Rajendra Kumar Sancheti only. In support of his
submission, he placed reliance upon the judgment of this Court in the
case of Vijay Kumar & another Vs. M/s. Shriram Industries & others
reported in 2016(4) MPLJ 397 (=AIR 2017 MP 16) .
15. On the other hand, learned counsel appearing for the plaintiff
refuted the aforesaid submissions. He, at the outset, submitted that no
such objection was taken by the defendants in the written statement
and, therefore, a new plea cannot be allowed to be raised at this stage.
He further submitted that the firm is duly registered under the Act of
1932 and Shri Rajendra Kumar Sancheti is one of partners of the firm.
He, therefore, submitted that Shri Rajendra Kuma Sancheti was
competent to file the suit on behalf of the firm. It is his submission that
both the Courts have concurrently answered this issue in plaintiff's
favour and, therefore, no interference is warranted at the second
appellate stage. In support of his submission, the learned counsel
placed reliance upon Firm Narain Das Mangal Sen v. Anand Behari
Mishra reported in AIR 1958 MP 408 and Firm Gopal Company Ltd.
v. Firm Hazarilal & Company reported in AIR 1963 MP 37 . He also
referred to Madras High Court judgment in the case of Arunachalam
& Co., Partnership Firm by its Mg. partner, K. Arunachalam
Chettiar & others vs. M. Sadasivam reported in AIR 1985 Mad. 354

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and Karnataka High Court judgment in the case of Sapna Ganglani v.
R.S. Enterprises reported in AIR 2008 Kant.178 .
16 . Considered the submissions of learned counsel for the parties.
17 . Section 69 of the Indian Partnership Act, 1932 provides as
under:-
“ 69. Effect of non-registration.—
(1) No suit to enforce a right arising from a contract or
conferred by this Act shall be instituted in any court by or on
behalf of any person suing as a partner in a firm against the
firm or any person alleged to be or to have been a partner in
the firm unless the firm is registered and the person suing is
or has been shown in the Register of Firms as a partner in the
firm.
(2) No suit to enforce a right arising from a contract shall be
instituted in any Court by or on behalf of a firm against any
third party unless the firm is registered and the persons suing
are or have been shown in the Register of Firms as partners
in the firm.
*”
18 . Apart from the aforesaid, Order 30 Rule 1 of CPC also mandates
filing of suit on behalf of the firm by two or more partners. The
provision reads as under:-
“Order XXX- Suits by or against firms and persons
carrying on business in names other than their own-
1. Any two or more persons claiming or being liable as
partners and carrying on business, in India may sue or
be sued in the name of the firm (if any) of which such
persons were partners at the time of the accruing of the
cause of action, and any party to a suit may in such
case apply to the Court for a statement of the names
and addresses of the persons who were, at the time of
the accruing of the cause of action, partners in such
firm, to be furnished and verified in such manner as
the Court may direct. ”

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19. Section 69 of Act of 1932 deals with two classes of suits. Sub-
section (1) deals with suits filed by any person suing as a partner in the
firm against the same firm or any partner of the same firm. Further, sub-
section (2) deals with other class of suits filed by or on behalf of a firm
against any third party. The present is a suit filed by the firm against a
third party i.e. Municipal Council and is covered under Section 69(2) of
the Act of 1932.
20 . This Court in the case of Vijay Kumar (supra) dealt with the
similar issue involving interpretation of Section 69(2) of Act of 1932
and Order 30 Rule 1 CPC. The Court held as under:
“6.5. A close scrutiny of section 69(2) of the Act further
reveals that while making it mandatory for the plaintiff
partnership firm and the partners representing the said firm
to be registered, the term “persons” and not ‘person’ has
been employed. This reveals the legislative intent that the
plaintiff-partner should be more than one in number.
Meaning thereby that the plaintiff firm should be represented
by at least two or more partners and both the said partners
should be registered partners.
6.6. The object behind using the term “persons” in plural is
explicitly clear. A partnership comes into being only when
two or more persons agree to share profits of business
carrying on by them or any of them under the Act. Thus, the
very genesis of partnership is based on plurality and not
singularity.
6.7. The object behind this use of plural term of “persons” is
to ensure that at least two persons, which is the bare
minimum requirement for formation of partnership firm to
become plaintiffs to enable institution of a suit by them or
through them and thereby save the suit from being hit by the
prohibitory mandatory provisions of section 69(2) of the
Act.

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6.8. As regards Order XXX, Rule 1 of Civil Procedure Code,
is concerned, the same relates to the field of procedure and
provides that any two or more persons claiming or being
liable as partners and carrying on business, may sue in the
name of the firm and any one of them should sign and verify
the plaint.
6.9. This procedural arrangement made in the Civil
Procedure Code also contemplates two or more person,
which is again based on the same concept of plurality of
persons necessary for partnership to be bom.
7. Learned counsel for the respondents after placing reliance
on the Division Bench decision of this Court in the case of
Firm Gopal Company Ltd. Bhopal v. Firm Hazarilal
Compq/iy, Bhopal , 1962 M.P.L.J. 781 : AIR 1963 M.P. 37
contends that even a single registered partner (Mahila
Krishnakumari as in the present case) representing the firm
can save the suit from being dismissed under section 69(2)
of the Act.
7.1. A perusal of the said Division Bench decision of this
Court reveals that though this Court took into account
provisions of Order XXX, Rule 1 of Civil Procedure Code,
but the provisions of section 69 of the Act were not taken
into consideration. Thus, this decision is of no avail herein.
*
10. Testing the factual matrix attending the present case on
the anvil of the law laid down in various decisions supra, it
is crystal clear that section 69 of the Act prohibits institution
of a suit filed by a partnership firm or the partners against a
third party (as in the case herein) unless at least two
qualified partners represent the plaintiff partnership firm.
Qualified partners would mean partners whose names are
mentioned in the registration certificate of the partnership
firm.
11. Before concluding it would be appropriate to mention
that provisions of Order XXX of Civil Procedure Code, in
fact furthers the intent and object of section 69(2) of the Act.
Section 69(2) in mandatory term requires at least two or

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more qualified partners to represent the partnership firm
instituting the suit against a third party. While in similar
tenor, the provision of Order XXX, Rule 1 of Civil
Procedure Code, which is enabling in nature provides that
two or more partners may sue or be sued in the name of the
firm provided they are partners of the firm in question at the
time of accruing of the cause of action. Thus, there is no
occasion of any clash or contradiction between the
provisions of section 69(2) of the Act and Order XXX of
Civil Procedure Code.
*
13. In view of above discussions on the factual and legal
aspects of the matter, this Court has no hesitation to hold
that C.S. No. 15-A/1999, Shreram Industries v. Firm
Shyamsunder and Company filed by one of the qualified
partners, namely, Mahila Krishnakumari was not
maintainable.”
21 . Thus, it was settled that the suit in the name of firm cannot be
filed by one partner alone and should be filed by two or more partners.
Referring to the negative prohibitory language used in section viz . “No
suit to enforce a right….”, the Court held that the provision is
mandatory. Thus, it is to be held that the suit filed by Shri Rajendra
Kumar Sancheti alone in the name of firm was not maintainable in view
of Section 69(1) of Act of 1932 and Order 30 Rule 1 CPC.
22. The learned counsel for plaintiff-firm placed reliance of Firm
Narain Das Mangal Sen (supra) to counter the aforesaid objection of
defendants’ counsel. However, Firm Narain Das Mangal Sen was a
case dealing with provisions of Order 30 Rule 2 CPC which
contemplates disclosure of partners' names on demand made by
defendant. The learned counsel for plaintiff-firm heavily relies upon
this judgment and argued that non-disclosure of name of partners
would not entail dismissal of suit. However, the judgment is clearly

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distinguishable as it does not deal with the issue involved in this case.
Infact, the Division Bench in this case itself observed that “ The object
of Order 30 rule 2 C.P.C. is to let the defendant know, who the
members of the firm are. Such a disclosure is not tentamount to
addition of parties ”. Thus, Order 30 Rule 2 CPC cannot be applied
and/or compared with requirement to be complied with at the time of
filing of suit as contemplated under Order 30 Rule 1 CPC. The
judgment of Karnataka High Court in the case of Sapna Ganglani
(supra) also does not deal with the issue under discussion.
23. The learned counsel for plaintiff-firm then relied upon Firm
Gopal Company Ltd. (supra) . However, this judgment has already
been dealt with by this Court in the case of Vijay Kumar (supra) in
para 7 & 7.1 quoted above, observing that the judgment did not take
note of Section 69 of Act of 1932 and therefore, is of no avail in the
case. The plaintiff therefore, does not get any assistance from this
judgment.
24. The learned counsel for plaintiff firm then referred to Madras
High Court judgment in the case of M. Sadasivam (supra) which says
that since the objection was neither raised in written statement nor in
memo of first appeal, the same cannot be allowed to be raised for the
first time in second appeal. However, as observed hereinbefore, in the
case in hand, the objection is taken by defendants in para 7 of written
statement, though for Partner Chandra Kumar Sancheti. The specific
objection in the name of Partner Rajendra Kumar was also taken in para
2 of memo of first appeal. The objection is raised in this appeal also.
Thus, it cannot be said that the plaintiff firm is put to surprise by raising

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the objection for the first time in this appeal. The judgment of Madras
High Court is therefore, not applicable in the facts of this case.
25 . Learned trial Court though framed an issue in this regard and
answered the same in plaintiff's favour, however, both the Courts have
missed the real issue involved in this case. The Courts below labored
hard in recording a finding that Shri Rajendra Kumar Sancheti is one of
the partners of the firm and further that the firm is registered under the
Partnership Act. However, the objection which was raised in para 7 of
the written statement was about filing of the suit by a single partner. As
held by this Court in the case of Vijay Kumar (supra) , the suit could
have been filed by two or more partners. The objection raised by the
plaintiff's counsel that no objection was raised before the trial Court is
also not accepted in view of averments made in para 7 of the written
statement. Further, the provisions of Section 69 starts with negative
language using prohibitive phrase i.e. “No suit to enforce a right….”.
Thus, the defect is inherent and not raising the objection by defendant
would also not save it from dismissal.
26 . Considering the aforesaid, the additional substantial questions of
law are answered in defendants' favour and against the plaintiff. It is
held that the suit was not maintainable at the instance of only one
partner and could have been filed by at least by two partners of the
firm.
Regarding Substantial Question of Law framed on 31/03/2004:
27 . This issue is with regard to the plaintiff's entitlement to continue
to occupy the suit land after expiry of initial period of 25 years of lease.
Clause-1 & 2 of the lease provided for renewal of the lease and it reads

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as under:-
“1. 25
आरराजजी जजसकरा कक नक करा सलग ग्‍ंन है नगर पराललकरा से सराल
कसे ललयसे लजीजरसेन न्‍ट पर लजी है इस भूलमि पर हमिराररा यरा हमिरारसे
वराररकरान यरा करायमि मिमुकरामि ककी पच चजीस वर्ष तक कब जरा रखनसे करा
हक हरालसल हहोगरा ।
2. ( )
म यराद लजीज अवलधि पटन्‍टरा कसे छछः मिहहीनसे पभूवर्ष अगर हमि लजीज करा
नवजीनजीकरण कररानरा चराहसेगें तहो परार्षनरा पत्र पस तमुत करसेगें यकद उक त
अवलधि मिसे परार्षनरा पत्र पस तमुत न हहो तहो नगर पराललकरा कहो अलधिकरार
हहोगरा कक वह लनधिरार्षररत कमुल क से दमुगनरा कमुल क लसेकर नवजीनजीकरण
ककी मिग्‍ंजभूरही दसे हमिरारही ओर से नवजीनजीकरण करा परार्षनरा पत्र पस तमुत
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हहोनसे पर सराल तक म यराद लजीज पहलजी दफरा मिसे बढराई जरावसेगजी
-
और उसकसे पश चरात हमिरारही परार्षनरा पर समिय समिय पर
99 ( )
नवजीनजीकरण ककयरा जराकर कमुल अवलधि लनन यरान वसे वर्ष से
.”
अलधिक नहही बढराई जरावसेगजी
28 . Reading Clause 2, it was argued by plaintiff’s counsel that the
application for renewal of lease could have been filed within six
months of its expiry and thereafter also, but in that case, the Council
could have demanded lease rent at double rate. However, As per the
Clause 2, the plaintiff was required to apply for renewal of lease before
six months prior to expiry of lease period of 25 years. Further, if the
application is made within six months of its expiry, the lease rent at
double the rate could have been demanded by Council. The lease does
not contemplate submission of application for renewal of lease after
expiry of ease period. However, the same is inconsequential in this case
inasmuch as the plaintiff submitted the application for renewal of lease
before six months of expiry of lease. Both the Courts have concurrently
recorded a finding that the plaintiff had applied for renewal of lease

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well within time on 07/11/1984. Therefore, the condition enumerated in
Clause 1 & 2 of the lease stood complied with.
29. However, larger issue is as to whether merely by making an
application, the lease would get automatically renewed?
30 . Neither in the lease deed dated 23/07/1960 nor in any statute,
there is a provision for deemed renewal of lease. As per Section 17(1)
(d) of the Registration Act, 1908, the lease of immovable property for
period more than one year is required to be compulsorily registered.
Thus, in absence of any registered lease deed executed, the lease deed
cannot be said to be automatically renewed in plaintiff’s favour merely
because it applied for renewal on 07/11/1984. At best, by making
application within the time, the plaintiff can claim for renewal of the
lease. The contrary findings recorded by the Courts below in this regard
are, thus, found to be perverse, illegal and, therefore, liable to be set-
aside.
31 . The learned counsel for plaintiff firm invoked provisions of
Section 111(g) read with Section 112 of Transfer of Property Act, 1882,
to say that, the defendants having accepted the lease rent, have waived
forfeiture of lease under Section 111(g) of the TP Act. Section 111 of
TP Act provides for the modes of determination of lease. One of the
modes is by efflux of time limited in lease whereas clause (g) provides
for determination of lease on account of violation of condition of lease.
Section 111(g) of the TP Act provides as under:
“ 111 . Determination of lease .- A lease of immovable
property determines—
xxx xxx xxx
( g ) by forfeiture, that is to say, (1) in case the lessee breaks

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an express condition which provides that, on breach thereof,
the lessor may re-enter [*]; or (2) in case the lessee
renounces his character as such by setting up a title in a
third person or by claiming title in himself; [or (3) the lessee
is adjudicated an insolvent and the lease provides that the
lessor may re-enter on the happening of such event]; and in

[any of these cases] the lessor or his transferee [gives notice
in writing to the lessee of] his intention to determine the
lease;”
Thus, provisions of Section 111(g) apply in a case of subsisting
lease which can be determined on account of violation of any condition
thereof. However, this provision would not apply in case of renewal of
lease after expiry of its term. For the same reason, Section 112 of TP
Act would also not apply which provides for waiver of forfeiture of
lease under Section 111(g) of TP Act.
32. Much stress was laid by learned counsel for plaintiff firm on
Section 116 of TP Act which provides for effect of holding over.
Section 116 of TP Act provides as under:
“ 116 . Effect of holding over .- If a lessee or under-lessee of
property remains in possession thereof after the
determination of the lease granted to the lessee, and the
lessor or his legal representative accepts rent from the lessee
or under-lessee, or otherwise assents to his continuing in
possession, the lease is, in the absence of an agreement to
the contrary, renewed from year to year, or from month to
month, according to the purpose for which the property is
leased, as specified in Section 106.
33 . A reading of this provision reveals that if a lessee remains in
possession of property after the determination of the lease and the
lessor accepts rent from the lessee or otherwise assents to his
continuing in possession, the lease is, in the absence of an agreement to
the contrary, renewed from year to year, or from month to month,

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according to the purpose for which the property is leased.
34. Section 116 of TP Act would apply in a case where the lessor
assent to lessee’s continuing in possession without any protest. A copy
of letter 12.10.1988 written by plaintiff firm to the Council, marked as
Ex.P/2 & P/21 states that the Council has orally informed the plaintiff’s
representative about termination of lease. Even though, there is no such
document brought on record by Council, however, the recital of
plaintiff’s own letter shows that the Council has not agreed for
continuation of lease. Thus, the applicability of Section 116 of TP Act
is ousted and plaintiff does not get any benefit only because it
deposited the annual lease rent even after expiry of lease period.
35 . As per the terms of lease, the plaintiff would have right to get the
lease renewed for a further period of ten years upon expiry initial
period of lease. However, this right is subject to Clause 5 of the lease
which prohibits sub-letting of the suit land by the plaintiff. If any
condition of the lease is violated, the plaintiff's right to get lease deed
renewed would be hampered.
36 . It is the specific case of the defendant Council that the plaintiff
firm has sub-let the premises to various persons. Learned trial Court as
well as the Appellate Court have not found this allegation as
established. The learned counsel for defendants read over statement of
various plaintiff witnesses to say that the finding recorded by both the
Courts is perverse being contrary to evidence.
37 . One Indra Kumar Gandhi has been examined as PW-2. In
paragraph 2 of his statement, he has stated that he is running a petrol
pump on the suit land for which he give fixed share profit to the

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plaintiff firm. He also admits that for the work of service station and
automobile also, he gives fixed share profit to the plaintiff firm. He also
stated that the plaintiff firm has raised Pakka construction over the suit
land in the year 1961-62. Importantly, in paragraph 8 of his statement,
this witness stated that he took over the business from the plaintiff firm
on fixed profit sharing basis for which there is contract in writing
executed with the plaintiff firm. However, the written contract is not
produced by plaintiff. He also stated that he is paying Rs.1200/- per
month to the plaintiff firm. As against annual lease rent of Rs.279.50,
the plaintiff has parted with possession of suit land to this witness for
Rs.1200/- per month. This witness further admitted that no intimation
about taking over of business was given by him to the defendant
Council.
38 . Shri Indra Kumar Gandhi further stated in para 9 of his statement
that the other persons are also doing work over the suit land. In para 12,
he accepts that petrol pump running on the suit property is not in the
name of the plaintiff firm. Importantly, on being asked by the Court in
concluding paragraph, this witness stated that M/s Sudhir Automobiles
has the petrol pump of Bharat Petroleum of which he is the sole owner.
He also states that the license has been given to him for running the
petrol pump.
39 . From the statement of this witness, it is evident that he has taken
over the business from the plaintiff firm for which he gives fixed profit
share to the firm. As per the lease deed, the annual lease rent payable to
the defendant Council is Rs.279.50. As against this, Shri Indra Kumar
Gandhi pays Rs.1200/- per month to the plaintiff firm. It is also

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gathered that there are other persons also who are doing business on the
suit land.
40. One Amanmal has been examined as PW-3 on behalf of the
plaintiff. In para 3 of his statement, he states that Sudhir Automobiles
and Indra Kumar Gandhi are doing their work (business) on the suit
land for which they give fixed share of profit to the plaintiff firm. In
para 5, he stated that both, the plaintiff firm and Sudhir Automobiles
are engaged in the business of automobiles on fixed profit sharing
basis. No lease deed was executed in favour of Sudhir Automobiles is
stated in para 10 by this witness. In this paragraph, he also accepts that
the fixed share of profit is being given by Sudhir Automobiles to the
plaintiff firm.
41 . In para 13, this witness stated that Sudhir Automobiles is running
the petrol pump over the suit land for last 20 years and that during this
period no petrol pump is running in the plaintiff name. In para 14, he
accepted that one Abdul Latif, Rajkumar, Sudhir Gandhi and Kishore
Kumar are also doing their business on the suit lad but he denies that
the plaintiff has sub-let the land to them.
42 . From the aforesaid statement of Indra Kumar Gandhi and
Amanmal, it can be easily gathered that the plaintiff has parted with
possession of suit land to various persons including Sudhir
Automobiles which amounts to sub-letting. During the course of
arguments, learned counsel for the plaintiff tried to explain this by
saying that the land is leased out to the plaintiff for the work of petrol
filling station, showroom, work-shop, canteen and rest house and to
carry out these activities, he has to engage other persons. However,

19

engagement of other persons would mean taking work from them in
lieu of wages. However, the fact that these persons are giving profit
share to the plaintiff only means that the exclusive possession is given
to the persons for running their business.
43. The learned trial Court as also the First Appellate Court totally
failed to appreciate this important piece of plaintiff’s evidence and
grossly erred in holding that the allegation of sub-letting is not proved.
The finding of both the Courts in this regard is, thus, found to be
perverse and contrary to evidence. The same is, therefore, not
sustainable.
44. The learned counsel for plaintiff firm submitted that the
interference with concurrent findings of fact by this Court is not
permissible in view of limited scope of Section 100 CPC. To support,
he relied upon Apex Court judgment in the case of Amar Bahadur
Singh vs. Devendra Singh reported in 2008(2) MP LJ 70 = (2008)2
JLJ 327 . This Court laid down following proposition about substantial
question of law:
“17. No exhaustive list that what are the substantial
questions of law can be given but the basic ingredients
constituting a substantial question of law has been
enumerated in Gurudev Kaur (supra) and Govindaraju
(supra). If a case would fall under the following
circumstances, it may raise a substantial question of law:
(i) The question of law on which there is conflict of
judicial opinion and not finally decided by
Supreme Court, Privy Council; or by Federal Court
[see Sir Chunilal v. Mehta (supra)];
(ii) The finding which has been arrived at by
Courts below without any evidence on record [see
Sree Kondiba Dagadu Kadam v. Savitribai Sopan

20

Gujar , (1999) 3 SCC 722 and Rohni Prasad v.
Kasturchand , (2000) 3 SCC 668];
(iii) Inference from or legal effect of proved or
admitted facts;
(iv) Disregard or non-consideration of relevant or
admissible evidence [see Sri Chand Gupta v.
Gulzar Singh , (1992) 1 SCC 143 : AIR 1992 SC
123 and Ishwar Dass Jain v. Sohanlal , (2000) 1
SCC 434];
(v) Taking into consideration irrelevant or
inadmissible evidence [see Santakumari v.
Lakshmi Amma Janaki Amma , (2000) 7 SCC 60,
Karnataka Board of Wakf v. Anjuman-E-Ismail
Madris-Un-Niswan , (1999) 6 SCC 343 : AIR 1999
SC 3067 and Kondiba Dagadu Kadam and Ishwar
Dass Jain (supra)];
(vi) Misconstruction of evidence or document [see
Sundra Naicka Vadiyar v. Ramaswami Ayyar ,
1995 Supp (4) SCC 534 : AIR 1994 SC 532 and
Sukhdei v. Bairo , (1999) 4 SCC 262];
(vii) Interpretation or construction of material
documents [see Kondiba Dagadu Kadam (supra)
and Mehrunnisa v. Visham Kumari , (1998) 2 SCC
295];
(viii) A question of admissibility of evidence [see
Kondiba Dagadu Kadam (supra) and Banarsi Das
v. Brig. Maharaja Sukhjit Singh , (1998) 2 SCC 81 :
AIR 1998 SC 179];
(ix) Disposal of appeal by first Appellate Court by
allowing application to adduce additional evidence
by one party without giving opportunity of rebuttal
to the other party;
(x) New plea on pure question of law going to the
root of the matter;
(xi) Rejection of admissible evidence on flimsy
ground [see Major Singh v. Rattan Singh , (1997) 3

21

SCC 546 : AIR 1997 SC 1906 and Ishwar Dass
Jain (supra)];
(xii) Gross miscarriage of justice [see Rohini
Prasad (supra) and Mohd. Yunus v. Gurubux
Singh , 1995 Supp (1) SCC 418]
(xiii) Biased approach of the Courts below (see
Banarsi Dass (supra);
(xiv) Reversal of finding by first Appellate Court
without evidence [see Mehrunnisa (supra)];
(xv) Perverse finding recorded by the Courts below
[see State of Rajasthan v. Harphool Singh , (2000)
5 SCC 652 and Rajappa Hanamantha Ranoji
v. Mahadev Chkannabasappa , (2000) 6 SCC 120];
(xvi) Inconsistent and contradictory finding of the
Court [see Harphool Singh (supra)];
(xvii) When appeal is decided only on equitable
ground and without application of mind [see M.D.
Hadi Hussain v. Abdul Hamidl Choudhary , (2000)
10 SCC 248];
(xviii) When the Court has no jurisdiction [see
Kondiba Dagada Kadam (supra)].
Thus, as per this judgment also, disregard or non-consideration
of relevant or admissible evidence {clause (iv)} is also a substantial
question of law. As discussed above, the courts below failed to
consider material evidence of plaintiff’s own witnesses and recorded a
perverse finding with regard to sub-letting of suit land by plaintiff.
45. This substantial question of law is also answered in favour of
defendants and against the plaintiff.
46 . In view of the aforesaid, the judgment and decree dated
01/10/2002 passed by the Second Additional District Judge, Shivpuri in
Civil Appeal No.11-A/2002 and the judgment and decree dated

22

11/01/2002 passed by Civil Judge, Class-1, Shivpuri in Civil Suit
No.32-A/1999 are found to be unsustainable in law and are,
accordingly, set aside. Consequently, the suit filed by the plaintiff is
dismissed .
47. The plaintiff shall also bear the costs of the defendants.
(ASHISH SHROTI)
JUDGE
rahul
Digitally signed by RAHUL SINGH PARIHAR
DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH
AT GWALIOR, 2.5.4.20=eac942476567cd1b39b3da46068403462fdf82ab6
76d0cde4dee473fe77953f5, ou=HIGH COURT OF MADHYA
PRADESH BENCH AT GWALIOR,CID - 7063520, postalCode=474001, st=Madhya Pradesh,
serialNumber=0275c4f803f94c47998be5c534e21bded910f
d4ab9d159b55575e814d05b2eed, cn=RAHUL SINGH
PARIHAR Date: 2026.09.08 12:38:33 +05'30'
RAHUL SINGH
PARIHAR