Akshay Sanjay Dhumal vs Kiyaara Buildcon Thr. Its. Partners And Others

CNR No : HCBM010383472026

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
COMMERCIAL APPEAL FROM ORDER NO. 21 OF 2026
Akshay Sanjay Dhumal ...Appellant
Versus
Kiyaara Buildcon, a Partnership Firm,
Thr. Its Partners & Ors. ...Respondents
WITH
INTERIM APPLICATION NO. 6248 OF 2026
IN
COMMERCIAL APPEAL FROM ORDER NO. 21 OF 2026
Akshay Sanjay Dhumal ...Applicant
Versus
Kiyaara Buildcon, a Partnership Firm,
Thr. Its Partners & Ors. ...Respondents
_______
Mr. Atul Damle, Sr. Adv. i/b Prashant More a/w Kanchan Chindarkar & Arti B.
Bhoir for Appellant.
Mr Sitesh Sharma a/w Vijay Upadhyay & Nitesh Sancheti for Respondent Nos. 1
to 3.
_______
CORAM: G. S. KULKARNI &
DR. NEELA GOKHALE, JJ.
th
DATE: 27 OCTOBER 2026
Judgment (Per Dr Neela Gokhale, J.):
PRASAD
RAJENDRASING
RAJPUT
th
1. This Appeal is directed against the Judgment and Order dated 14 July
Digitally signed by
PRASAD
RAJENDRASING RAJPUT
Date: 2026.10.28
12:23:45 +0530
2026, passed by the learned District Judge-1, Pune, in Commercial Suit No. 34 of
2025 (‘ the impugned order ’) filed under Section 13(1A) of the Commercial
Courts Act, 2015 read with Order XLIII Rule 1(r) and (s) of the Code of Civil
Procedure, 1908 (‘ CPC ’), whereby the Respondent No.2 (Orig. Defendant No.2)
herein has been appointed as a Court Receiver under the provisions of Order 40
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Rule 1 of the CPC, to oversee the management and complete the development and
construction activity of the redevelopment project of one Radha Anand Housing
Society and to transfer the unsold units in the project on terms and conditions as
stipulated in the said order.
2. The impugned common Judgment and Order was passed on four
applications, namely an application (Below Exhibit-5) made by the Appellant
seeking interim injunction inter alia restraining Respondents from changing the
nature of the property, possession and from selling or alienating the flats. In the
same application, the Appellant also sought appointment of an ad-interim receiver
during the pendency of the main application. The Appellant also filed the second
application at Exhibit-6, seeking appointment of an eligible third party as receiver
to carry out the remaining construction. The Appellant also filed the application at
Exhibit-121, seeking the ad-interim reliefs sought in the applications at Exhibits-5
and 6. Respondent Nos. 1 to 3 also filed an application at Exhibit-128, seeking
appointment of Respondent No. 2 as Court Receiver on behalf of Respondent No.
1-Firm and seeking to restrain the Appellant from obstructing the construction and
development activities of the redevelopment project undertaken by the partnership
firm.
3. It is the Appellant’s case that he was admitted as a partner of Respondent
th
No. 1 firm on 24 September 2021. The Appellant held a 33% share in the profits
and losses of the partnership firm, against 67% held by Respondent No. 2. The
partnership deed stipulated that the partnership was “At Will” and that its bank
accounts had to be operated jointly. The partnership firm was engaged in only one
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construction project namely the redevelopment of one Radha Anand Co-operative
Housing Society at Erandwane Pune. A development agreement between the
partnership firm and the society was executed along with a power of attorney
executed by the Society in favour of the firm. As per the deed agreement, the
Society was to construct 47 flats in total, of which 18 were for Society members,
and the remaining were available for sale to the Respondent Firm. The Court is
informed that as on date, 45% of the work in the A-wing and 80% in the B-wing is
complete.
4. It appears that disputes and differences had arisen between the two partners,
Appellant and Respondent No.2 sometime in November 2024 inter alia on an
issue that Respondent No.2 had executed agreements of sale in respect of three
flats (502A, 503A and 702B) in respect of which the Appellant alleged that
Respondent No. 2 executed agreements at a rate which was below the market rates,
which, according to the Appellant was Rs. 17,000/- per sq. ft., without receiving
proportionate consideration from the flat purchasers as per the construction stage.
It was alleged that Rs. 2 crores remained outstanding from the said purchasers, and
only Rs. 12 lakhs were received as consideration. There were other allegations as
nd
well. The Appellant, hence issued a legal notice dated 22 April 2024, addressed
to the Respondents dissolving the firm and seeking rendition of accounts from
Respondent No. 2.
5. Having issued a notice of dissolution, the Appellant instituted a suit for a
declaration of dissolution, rendition of accounts and permanent injunction.
Respondent Nos. 1 to 3 contested the suit and filed a counterclaim alleging breach
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of the Partnership Deed by the Appellant. Both the parties made interim
applications seeking various reliefs against each other, primarily seeking
appointment of a Court Receiver.
6. Considering the facts and circumstances of the case, the learned District
Judge appointed Respondent No. 2 as a Court Receiver and permitted him to
oversee the management and completion of the development and construction
activities of the redevelopment project and also sell the unsold units on the terms
stipulated in the said order. The present Appeal is directed against the said order.
7. Heard Mr Atul Damle, learned Senior Advocate, representing the Appellant
and Mr Sitesh Sharma, learned Advocate, appearing for Respondent Nos.1 to 3.
We have also perused the record of the proceedings with their assistance.
8. Mr Damle’s grievance is limited. Although Mr Damle conceded that the
order protected the Appellant's interests, he objected to appointing Respondent
No.2 as Court Receiver. Mr Damle contended that if the Court permits
Respondent No.2 to oversee the management of the redevelopment and
construction activities and sell the unsold flats, the Appellant is likely to suffer
financial hardship. The Appellant will have no control over Respondent No. 2's
actions. Mr Damle further contended that the Appellant has made serious
allegations of breach of fiduciary duty against Respondent No.2, and that
permitting him to continue the alleged breach creates a conflict of interest. It is
further submitted that the Appellant issued the notice of dissolution of partnership,
which resulted in the dissolution of the partnership. Without first determining the
consequences of dissolution, the Trial Court has erroneously appointed
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Respondent No.2 himself as Court Receiver. On these main grounds, amongst
others, Mr Damle has assailed the impugned Judgment and Order.
9. Per contra, Mr Sharma, at the outset, submitted that the Appellant has not
made out any perversity in the impugned Judgment and Order and there is no
embargo on appointing the partner himself as a Receiver. He drew our attention to
Section 47 of the Indian Partnership Act, 1932, which provides that partnership
firms remain responsible for completing transactions that remained unfinished at
the time of dissolution. He also submitted that, in pursuance of the development
agreement and the contractual obligations, it is Respondent No.2 who has done all
the work, including procuring the sanctioned layout and building plans from the
Corporation, obtaining the commencement certificate, incurring considerable
expenditure on the construction work already undertaken, including spending
Rs.1,82,87,086/- from his personal account towards the project. On the other
hand, the Appellant has infused only Rs.19,17,736/- as capital and has, in fact,
withdrawn Rs.95,00,000/- as a loan from the Respondent-Firm. Furthermore, the
Appellant had not participated in the day-to-day working of the firm, as he
continued to maintain his day job in the Axis Bank. Mr Sharma further stated that
the firm had appointed contractors and professionals for the project and has also
borne their fees. He submitted that the Appellant owes huge amounts to the
partnership firm, for which the Respondents have filed a counterclaim for
Rs.7,82,69,253/-. Mr Sharma thus submitted that the Appellant was not interested
in discharging his obligations towards construction of the redevelopment project
and is only interested in profiteering from the venture. Respondent No.2 also bears
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the responsibility of paying rent to society members who have vacated their units
to facilitate redevelopment. The Respondent is concerned about the flat purchasers
and the Society members awaiting possession of their respective units, a
recognition under the mandate of Section 47 of the Partnership Act. In these
circumstances, Mr Sharma submitted that the impugned Judgment and Order is
not illegal and that no intervention is required. He thus sought rejection of the
Appeal.
10. The Appellant’s grievance is that the learned Trial Court, although recorded
that the allegations of undervaluation and diversion are issues which would be
tested in the trial, it was appropriate that Respondent No.2 is appointed as the
Receiver on considerations of commercial expediency and authorised Respondent
No.2 to operate the firm’s bank accounts without the Appellant’s signature, utilise
partnership funds, complete the project and deal with the unsold flats; has
undertaken a premature merits evaluation of the rival valuation charts by treating
the Ready Reckoner value as the benchmark; has overlooked that Exhibit 128 was
also signed by Respondent No. 3, whose induction is itself under challenge; and
has treated a deposit of Rs. 2 Crores as adequate safeguard.
11. It is well-settled that the Court would appoint a Receiver in exercise of
powers under Order XL Rule 1 of the Code of Civil Procedure, 1908, to prevent
the ends of justice from being defeated, whenever, having regard to the facts and
circumstances of the case, it considers such appointment to be just and convenient
to secure the rights and interests of the litigating parties. The object is to preserve
the subject matter of the litigation pending judicial determination of the rights of
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the parties. The effect of the Court appointing a Receiver is that the property in
respect of which the Receiver is appointed becomes custodia legis and is held for
the benefit of the different parties, including the parties before the Court. The
appointment of a Receiver is discretionary. Such order appointing court receiver
would be made only when the Court is prima facie satisfied that the plaintiff has a
good chance of succeeding in the suit. The major considerations would also
include whether the plaintiff has established the existence of adverse and
conflicting claims to the property and whether there is a situation of danger or loss
necessitating immediate action. As to who can be appointed as a Receiver is also
something which in the facts and circumstances of the case would be the discretion
of the Court. It is also settled that, in selecting a person to be appointed as Receiver,
the Court is not obliged to appoint a person of the choice of the parties. A party to
the litigation can be appointed as Court Receiver in special circumstances, as the
case may require as in the present case. In the facts of the present case, the learned
trial Judge, in the impugned order, has considered the consequences that would
ensue, if respondent no. 2/defendant no. 2 was not appointed as Receiver. It is
difficult to conceive that a third party, having no knowledge of the intricacies of the
business in question, could be roped in and appointed as Receiver. Appointing a
third party as Receiver in these circumstances would, in fact, be detrimental to the
interests of the parties. The learned Trial Judge was, therefore, certainly conscious
of the consequences that would ensue, if a third party was to be appointed as the
Receiver of the project. In the facts of the case, we accordingly find no infirmity in
the approach adopted by the learned trial Judge in appointing defendant
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no.2/respondent no. 2 as Receiver in respect of the partnership project in question.
Further, in appointing the Court Receiver, the learned trial Judge has shown due
regard to the severe prejudice that would be caused to third parties, namely, the flat
purchasers and the members of the Society, who are awaiting the benefits of the
redevelopment being undertaken by the partnership firm. Hence, considering the
nature of the dispute as raised by the appellant which has a percolation beyond the
disputed issues and the accounts inter se between the two partners, the rights of
third parties in such circumstances assume significance which cannot be overlooked
by the Court, while passing orders on the partnership dispute. It is such
consideration which has weighed with the learned trial Judge in appointing
respondent no. 2 as Court Receiver. The discretion in appointing respondent no.2
as the Court Receiver, thus has been fairly and justly exercised by the learned trial
Judge. The approach as adopted by the Learned Trial Judge in passing the
impugned order cannot be faulted, either in law or in the facts of the case.
We may usefully refer to the decision in Prem Prakash Kapoor vs. Gobind
1
Ram Kapoor & Ors. , which dealt with a partnership dispute. The Jammu and
Kashmir High Court, while dealing with a case of running business of the
partnership firm, held that a stranger should not be appointed as Receiver to take
over and run the business, unless compelling circumstances warranted such
appointment. The Court made the following observations:
“ 16. The question still remains: who should be appointed receiver and with what
powers and functions? Here one cannot lose sight of the fact that the partnership
consists of a big business dealing with the manufacture and sale of cloth and
other piece goods. It has a manufacturing unit in Srinagar and associated with the
1 1975 SCC OnLine J&K 17
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unit are quota rights. The business of the partnership is conducted in a shop in
Amirakadal which is the main business centre of the City to which is
also attached a godown nearby. Every business house has its own ways of dealing
with the business and its suppliers and customers. The ultimate object of every
business house is to make greater profits and at the same time to give maximum
satisfaction to those it comes to deal with, be they its suppliers or customers. The
members of each business house assiduously work to that end which a stranger, if
let in, will not do. Accordingly in the case of a running business, like the present,
the court will not, except under compelling circumstances, let a stranger take over
the business and run it. There are not such compelling circumstances present in
the instant case. In that view it will be proper if the defendants, who are
admittedly having control of the business and its assets, should be appointed as
joint receivers of the partnership property and the business. They will be required
to maintain proper accounts of the assets of the partnership both capital and
liquid including the income accruing from the business and submit quarterly
returns to this court pending final conclusion of the suit. They will also be
required not to draw money from the business for personal use in excess of their
normal requirements. Lest the defendants should misuse the property or cook up
the accounts, it will be proper if a nominee of the plaintiff is associated as a co-
accountant with their accountant and the accounts of the firm are required to be
maintained under the joint signature of the two accountants, the nominee of the
plaintiff in addition keeping watch over the business and its assets generally. This
was in fact the mode suggested by the learned counsel for the plaintiff who
plainly conceded that it was not proper to introduce a stranger to take over a
running business like the one in the present case. The suggestion has appealed to
me and I have no hesitation in adopting the same. I make an order accordingly.
The plaintiff will give the name of his nominee within a couple of days. The
defendants will associate him with themselves to discharge the functions
mentioned above. His salary or wages, whatever it might be, shall be borne by the
plaintiff as was undertaken at the hearing by the counsel appearing on his behalf.
The application for receivership shall be filed.”
12. Keeping in mind these principles of law, and as applicable in the facts and
circumstances of the present case, it is an admitted position that the only grievance
made by the Appellant is regarding three flats alleged to have been sold by the
Respondent No.2 for inadequate consideration and has not given accounts of the
same. By contrast, the Appellant has not brought in any substantial capital to the
firm. On the contrary, the Appellant has drawn Rs.95,00,000/- as a loan from the
firm. The partnership firm is presently engaged in only one redevelopment project.
It is quite clear that the ongoing business is stuck in the inter se dispute between
the partners. As many as 16 society members have vacated their flats and are
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residing in rented accommodations, for which Respondent No. 2 is bearing the
expenditure. Additionally, the flat purchasers who have entered into flat purchase
agreements with the firm are also awaiting possession of their respective units.
Only because of the Appellant's limited claim, the entire project is in jeopardy.
Given the circumstances, we felt it appropriate to ask counsel whether the dispute
could be resolved through mediation. We were informed that the parties had been
referred to mediation thrice, but no resolution followed. Yet we gave the parties
time to discuss a possible settlement. The Appellant refused to agree to a settlement
while insisting on his demand for five flats from Respondent No. 2. Whereas as
informed to us by learned Counsel for the Respondents, the Respondents had
offered three flats. Be that as it may, there was no alternative but to proceeded to
hear the parties.
13. The documents on record, including the development agreement, clearly
reveal that the partnership has pending commitments, payments to vendors and
suppliers, which need to be fulfilled. Moreover, we are surprised to note that, apart
from the meagre amounts, the Appellant has not contributed to the firm's day-to-
day operations, as he was admittedly gainfully employed at Axis Bank throughout.
Thus, the suit for dissolution and accounts involves serious questions of fact, which
we are not called upon to deal at this stage of the proceedings also not being the
subject matter of the Appeal. Suffice it to observe that the Appeal is in a narrow
compass, limited to examining the validity of the impugned interim Order. We are
of the considered view that, while appointing Respondent No. 2 as Receiver, the
District Judge considered the questions of prima facie case, balance of convenience,
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and irreparable injury when for sound reasons, the learned Judge in the facts and
circumstances of the case and the bearing of the dispute in the partners of the
Society and third party flat purchasers has considered it appropriate to appoint
Respondent No.2 / Partner as the Court Receiver to complete the project. We do
not find that in the facts of the case such approach is in any manner illegal or
perverse.
14. The Supreme Court in Ramakant Ambalal Choksi v. Harish Ambalal
2
Choksi and Anr. , has held that while considering an Appeal from an interlocutory
order granting or declining to grant interim relief, the Appellate Court is only
required to adjudicate the validity of such order applying the well-settled principles
governing the scope of jurisdiction of the Appellate Court under Order 43 of the
CPC.
15. The impugned Judgment and Order has also protected the interests of the
Appellant as the Court has directed Respondent No.2 to deposit Rs.2 crores in the
Court as a condition precedent while permitting him to sell flats in the scheme.
Further, the Court directed that Respondent No. 2 shall not confirm any
agreement of sale without following the procedure stipulated in the order and
without the Court's prior concurrence.
16. In these circumstances, we find no infirmity or illegality in the impugned
Judgment and Order. The same cannot be said to be perverse or against material
available on record. The issues regarding dissolution of partnership and accounts
are disputable questions pending adjudication by the Trial Court. The impugned
2 (2024) 11 SCC 351
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Judgment and Order is well reasoned, and the Trial Court has exercised its
discretion judiciously.
17. In the light of the aforesaid discussion, we are of the clear opinion that the
impugned Order does not require any interference.
18. The Appeal is accordingly dismissed. Cost to be cost in the cause.
19. In view of disposal of the Appeal, interim applications, if any, also stand
disposed.
(DR. NEELA GOKHALE, J) (G. S. KULKARNI, J.)
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