Biswaroop Chowdhury, J.
1. This is an application filed by the plaintiff no- 10/petitioner praying for the following reliefs;
a) An Order be passed recalling and/or modify and/or set aside the order dated 02.05.2025 passed by His Lordship The Hon’ble Justice Biswaroop Chowdhury in C.S. No. 348 of 2013 (M/S. Ashutosh Ray Prafulla Kumar Ray and Ors VS Md. Iqbal Khan and Ors).
b) Restore C.S. 348 of 2013 (M/S. Ashutosh Ray Prafulla Kumar Ray and Ors VS Md. Iqbal Khan and ors.) to its original file and number and direct that the same be adjudicated on its merits and in accordance with law.
c) Stay of operation of the said order dated 02.05.2025 (passed in C.S. No. 348 of 2013) till disposal of the instant proceeding:
d) Pass such other or further order or orders and/or direction or directions as this Hon’ble Court may deem fit and proper.
The contention of the plaintiff in the application may be summed up thus;
1. In the year 2013 all the partners of the partnership Firm namely M/S. Ashutosh Ray Prafulla Kumar Ray (hereinafter referred to as the said partnership firm) instituted a suit being C.S. No. 348 of 2013 before this Hon’ble Court against the defendants seeking their eviction from the suit property.
2. The defendants filed their written statement and were contesting the suit. During pendency of the said suit more than one partners passed away, and plaint has been amended. The defendants filed their written statement and were contesting the suit.
3. At the time of commencement of the C.S. 348 of 2013 all the plaintiffs jointly engaged Mr. Raghunath Chatterjee Learned Advocate of M/S. Chatterjee Sil and Co. Solicitors and Advocates as the advocate on record. At all material times Mr. Raghunath Chatterjee Learned Advocate of M/S. Chatterjee Sil Solicitors and Advocates was the advocate on record of all the plaintiffs. It is a matter of record that since all the plaintiffs were 14 in numbers (including the partnership firm), for logistic convenience Mr. Som Shankar Mukherjee, the plaintiff no. 9, was given authority to carry on the proceeding for and on behalf of all the plaintiffs. It was decided and agreed by and amongst all the plaintiffs that the said Mr. Mukherjee the plaintiff no.9 would take necessary steps and would carry on the proceedings for the benefit and on behalf of all the plaintiffs so that the claims made in the plaint be decreed conveniently.
4. Recently on or about second week of March 2025, the petitioner herein became shocked and surprised to learn from the said Learned Advocate of the plaintiff that the plaintiff no. 9 communicated to him that claiming albeit incorrect, that the plaintiffs do not wish to proceed with the present suit and thereby the plaintiff no. 9 instructed him to take necessary steps to withdraw the suit. The said Learned Advocate handed over a copy of letter dated 13.03.2025 issued by the plaintiff no. 9 in his favour.
5. Upon necessary enquiry the petitioner came to learn that the plaintiff no-8, 9 and 11 with aid and assistance of a few other plaintiffs were purporting to withdraw the suit. They were purporting to withdraw the suit behind the back of the petitioner and other dissenting partners.
6. Immediately thereafter the petitioner herein by a letter dated 20- 03-2025, communicated the said Learned Advocate, that he had not authorized the plaintiff no. 9 to withdraw the said suit and thereby instructed as a lawful existing partner of the Firm not to take any action for withdrawal of the subject suit. He also requested to issue ‘no objection Vakalatnama’ in his favour in the subject suit. With reference to the said letter dated 20-03- 2025, the Learned Advocate made a communication to the partnership firm narrating the above and purportedly sought for instructions by letter signed by all the partners for further steps to be taken by him. Thereby it was also communicated that the said Learned Advocate was unable to take any step in the subject suit without proper instruction.
7. The petitioner understood that the situation was getting complicated and he decided to file Vakalatnama for himself through another Learned Advocate on 25-04-2025. The present Learned Advocate of the petitioner filed a Vakalatnama in the present suit upon obtaining leave of this Hon’ble Court.
8. Immediately on the same day the present Learned Advocate of the petitioner herein being so instructed sent an e-mail to the said Learned Advocate of the plaintiffs, who had been engaged since inception of the suit, thereby inter alia, communicating that she had filed Vakalatnama on behalf of the petitioner as her client in the subject action. Thereby she also requested the said Learned Advocate not to take any step in the subject suit for withdrawal thereof, in as much as the petitioner herein is not inclined to withdraw the action but to proceed with the same. The said communication was made to all other plaintiffs, defendants and the Learned Advocate of the plaintiffs excluding the petitioner herein.
9. On 05.05.2025 while checking the case status of some other cases in the official site of the Hon’ble High Court, Calcutta the present Learned Advocate of the petitioner became shocked and surprised upon ascertaining that the suit being C.S. No. 348 of 2013 had been dismissed as withdrawn.’ Ms. Jana could ascertain that on 02.05.2025 the suit appeared in the list and all the plaintiffs were purportedly represented by Mr. Anirudhya Dutta Learned Advocate. While the suit was taken up the said Mr. Anirudhya Dutta, Learned Advocate despite not having due authority represented all the plaintiffs including the petitioner herein and acting contrary to the instruction of the petitioner herein has withdrawn the suit. Immediately on 06.05.2025 M.S. Jana mentioned the suit before this Hon’ble Court whereupon his Lordship was pleased to direct the matter to be listed under the heading ‘To be Mentioned’ on 08.05.2025. On 06.05.2025, Ms. Jana served a letter/e-mail of even date to the said Learned Advocate M/S Chatterjee Sil and co, Mr. Anirudhya Dutta Advocate, Mr. Asim Kumar Mukherjee Advocate, inter alia, communicating that the said suit would be listed on 08.05.2025.
10. On 06.05.2025, in the afternoon the said order dated 02.05.2025 was found to be uploaded in the server wherefrom it appeared that the Learned Advocates claiming to be representing the plaintiffs purportedly submitted that the parties had settled their disputes and the suit may be disposed of. The Learned Advocates of the defendants also submitted the same. It appears that a Terms of settlement allegedly executed by Mr. Som Shankar Mukherjee claiming himself to be constituted attorney of all the parties had been filed in Court. Mr. Sil Learned Advocate (described as the erstwhile Learned Advocate on record for the plaintiffs) appears to remain present during the hearing however he also did not assert the aforesaid facts.
11. The petitioner through his present Learned Advocate had taken inspection of the record when the contents of the said Terms of Settlement allegedly executed for, and on behalf of the plaintiffs could be perused.
12. The petitioner was never aware of execution of the said Terms of settlement and the same has been preferred behind his back and that too contrary to his interest. The said Terms of settlement purportedly records that in a meeting allegedly held amongst the partners they decided to withdraw the suit whereas the petitioner never attended any such meeting and was never called upon to attend any such meeting and is not aware of any such decision.
13. The order dated 02.05.2025 had been obtained by perpetrating fraud upon this Hon’ble Court as per the following particulars:
a) Neither the said Learned Advocate (described as erstwhile advocate on record) nor any other Learned Advocate nor any party to the suit informed this Hon’ble Court that the petitioner herein had filed Vakalatnama through his present Learned Advocate and he never consented for withdrawal of the suit but to continue to proceed with the same.
b) The suit had been withdrawn without proper representation of the fact and upon suppression of the material fact from this Hon’ble Court.
c) The plaintiff no. 9 acting as the constituted attorney of the petitioner herein as well withdrew the subject suit inspite of specific instruction of the petitioner that he was not willing to withdraw the suit but to proceed with the same.
d) Withdrawal of the suit is totally against the interest of the firm and prejudicial inasmuch as;
i) The Firm or the plaintiffs would thereby accept their wrongful dispossession from the subject properties.
ii) The Firm and their partners would accept the possession of the defendants in the subject properties, albeit the same is wrongful.
iii) The Firm and the partners would lose all their interest in the money deposited by the defendants with this Hon’ble Court which could be received by the plaintiffs in the event of successful adjudication.
iv) The plaintiffs would gain nothing out of its decision to withdraw the suit.
e) Other partners have acted in collusion to – each other and are glaringly acting hand in gloves with the defendants causing wrongful loss to the Firm and the petitioner as well.
f) The instruction given by the petitioner that he was interested to proceed with the suit has not been brought to the notice of this Hon’ble Court.
g) Misrepresentation had been made to this Hon’ble Court that all the parties were willing to settle whereas the petitioner herein (being the plaintiff no. 10) was not at all willing to withdraw the suit but he instructed just the opposite.
h) The other partners of the partnership firm despite knowing well that the petitioner was not a consenting party had incorrectly, represented before this Hon’ble Court as if he also had given his consent and thereby obtained the said order by misrepresentation and fraud.
The Petitioner prayed that order Passed on 02.05.2025 in C.S. 348 of 2013 be recalled.
Affidavit in opposition was filed by plaintiff no-1 to 9 and 11, to 14 and the Defendants.
It is contended by the plaintiffs no. 1 to 9 and 11 to14 that the application filed by the petitioner is not maintainable on the following grounds.
a) The plaintiff no. 1 is a partnership firm. It was seized and possessed of two godowns situated at 15/1 Portuguese Church Street Kolkata-700001 which was handed over to the defendants in the year 2010 by approval of majority partners and affirmed by the Joint Receivers appointed by the Hon’ble Court.
b) The fact of handing over of possession of the said godowns in favour of the Defendants would be evident from the contents of an application being G.A. No. 3142 of 2010 in AP. No. 392 of 2007 for discharge of Joint Receivers by the partners of the erstwhile firm constituted under the Deed of Partnership dated 8th July 1986. From the averments and documents in support of the said application it would appear that in a Minutes of Meeting of the Joint Receiver on 25th August 2010 when it was considered as Agenda No. 1 that the possession of the said godown were with the Defendant and it was held that the parties shall take appropriate steps before the arbitration proceedings.
c) One of the partners of the erstwhile partnership firm and the predecessor in interest of the plaintiff no. 11 to 14 had raised objections against the Defendants being in possession but such protest and objection was rejected by this Hon’ble Court on account of such decision being taken mutually by majority of the partners and for the benefit of the said firm.
d) The said partner since deceased was also absent from such meeting despite notice of such meeting. Such fact would be evident from order dated 29th July 2011, passed by the Hon’ble High Court in G.A. No. 3142 of 2010 with AP No. 392 of 2007.
e) In respect of another property owned by the said erstwhile partnership firm situated at 170, Mahatma Gandhi Road, Kolkata-700001 an application under Section 9 of the Arbitration and conciliation Act 1996 was filed before this Hon’ble Court being A.P. No. 581 of 2012. It would appear from the documents disclosed in the said proceedings, that the plaintiff No. 10 had remained absent from the meetings and said principal property of the erstwhile partnership firm was sought to be sold in his absence. Therefore there is no embargo on any such decision being taken in respect of any business of the partnership firm when taken by mutual consent of majority of the partners.
f) Subsequently some of the Defendants filed a complaint against the plaintiff no. 10 on 14th December 2011 in respect of offences under Section 406, 420 read with Section 506 of the Indian Penal Code 1860 committed on 2nd August 2010. The plaintiff No. 1 was arrested on 26th June, 2012. The said plaintiff was remanded to Judicial Custody pending trial. Charge sheet was filed on 18th June 2013. Such facts were suppressed from the partners of the present partnership firm constituted on 13th July 2013.
g) The partnership firm over the years incurred substantial legal expenses on account of legal cost and counsel fees, no part of which was borne by the plaintiff no.10. The plaintiffs gained knowledge of the criminal proceedings against plaintiff no. 10, around the time when an order of conviction was passed by the Learned Metropolitan Magistrate 14th Court at Calcutta on 27th February 2024. The order of conviction specifically states that the sentence may be set off against the time spent by the plaintiff No. 10 in detention during pendency of trial.
h) News of conviction of the plaintiff No.10 was published in local newspaper and was in wide circulation amongst the tenants and neighbouring areas of the principal place of business of the partnership firm causing immense prejudice and disreputation to the other partners.
i) It is evident that the plaintiff No-10 has been using the suit as a counter to the criminal proceeding.
j) The plaintiff no-10 has raised disputes inter se the partners and such disputes and differences were referred to arbitration before the Learned Sole Arbitration Mr. Debdut Mukherjee, Advocate. The partners had entered into a terms of settlement on 23rd June 2021 and supplementary terms of settlement dated 20th July 2021, whereby the proceedings had stood terminated.
k) However, the plaintiff no-10 filed another application for the said terms of settlement and supplementary terms of settlement that was rejected by an order dated 20th June 2023 passed by the Learned Sole Arbitrator.
l) On account of the persistent actions of the plaintiff No. 10 against the partnership firm, the partners held a meeting on 30th June 2023 for which notice was admittedly served on the plaintiff No. 10 on 30th June 2023. Insteadof seeking information regarding the resolution taken in the meeting he proceeded to raise issue regarding the locus standi of the plaintiff No-9, the constituted attorney of the plaintiffs. Therefore it would be evident that the plaintiff no-10 had notice of the meeting held between the partners and elected not to participate in such meetings.
m) Another notice was issued by the plaintiff No-11 dated 30th November 2023 against the plaintiff no-10 for mismanagement of the partnership firm and it contains details of the illegal activities of plaintiff No. 10. The plaintiff no.10 received the notice and replied on 4th December 2023 and disputed the authority of some of partners from signing the rent receipts. The action of plaintiff No. 10. has been causing impediment in Collection of rent. Further plaintiff No. 10 in collusion and connivance with one Kamalesh Singh has been misappropriating sums and collecting rent from the tenants in the said building without authorization from the partners.
n) In the aforesaid facts and circumstances the plaintiff No. 8 had issued a notice dated 12th December 2023 calling for meeting of the partners to be held on 16th December 2023 with intention to resolve the expenses incurred and amicable resolution of all litigations against the plaintiff No. 1. On receipt of such notice the plaintiff no-10 replied by a letter dated 14th December 2023 and elected to remain absent and/or abstain from attending the meeting held between the partners on 16th December 2023.
o) Next meeting was held on 28th December 2023 for arriving at an amicable settlement between the parties but plaintiff no-10 did not attend. The partners had unanimously agreed to take steps for legal actions against the plaintiff No. 10.
p) Another meeting was held on 1st February wherein the partners had unanimously agreed to withdraw the instant suit being C.S. No. 348 of 2013 through the plaintiff No. 9 the constituted attorney.
q) Upon proper notice to plaintiff no-10 the majority of the partners had decided to withdraw the suit being C.S. No. 348 of 2013 and the constituted attorney made several requests with the erstwhile Advocate on Record of the plaintiffs to take steps for withdrawal and/or issue no objection to proceed with the decision of the partners but the said Advocate on record decided to issue notices to all the parties and more particularly the plaintiff No. 10.
r) The plaintiff no. 10 is not the owner of the said godown and/or does not have any independent right title or interest to maintain the present suit, as the plaintiff No. 1 is the lessee of the said godowns, which is a compendium of partners without whose consent or decision of majority of the partners of the plaintiff No. 1 the present suit is not maintainable or can be proceeded by the plaintiff No. 10.
11. The plaintiff No. 10 is a convicted felon on account of offences perpetrated against the Defendants. It is in the interest of the said plaintiff No-10 to keep the present suit pending as he would use the same to his benefit in the alleged appeal where he has allegedly obtained stay of order of his conviction.
12. The plaintiff No. 9 was given authority to carry on proceedings and depose in the suit on behalf of the plaintiffs, and such authorization is not revoked till date.
The plaintiffs no. 1 to 9 and 11 to 14 have also denied the contentions made in the application by the plaintiff no-10. The plaintiff have denied that the plaintiff no. 9 did not have authority to represent all the plaintiffs or that the said Advocate for the plaintiffs have acted contrary to the instruction in withdrawing the present suit as alleged or at all. The Advocate for the plaintiff no. 10 mentioned the matter only on 6th May 2025 without notice to the Advocate of the plaintiffs. It is denied that the Advocate for the plaintiff No. 10 had informed all the stakeholders of his intention not to withdraw the suit or proceed with the suit by the purported notice or that any information was suppressed by the plaintiffs as alleged or at all. The submissions of the plaintiff no. 10 that the Advocate gained knowledge of the order dated 2nd May 2025 on 6th May, 2025 afternoon is false and incorrect as the matter was mentioned before the Hon’ble Court on 6th May 2025, as would appear from the notice dated 6th May 2025 in the morning issued by the Advocate for the plaintiff No. 10. The plaintiffs have denied that they have acted in collusion with the defendants or that the withdrawal of the suit is not for the benefit of the firm.
The defendants have also contested this application by filing affidavit in opposition. The contention of the defendants may be summed up thus;
A. The majority decision of the partnership firm is binding on the firm and all the partners, therein as per Section 12(c) of the Indian Partnership Act 1932.
B. The plaintiff No. 10’s objection is an afterthought and is actuated by notice with sole intent to derail the settlement and coerce the Defendant into succumbing to his illegal demands. Plaintiff No. 10 has no legal or equitable justification to override the collective decision of the majority of the partners.
C. The plaintiff no. 10 was convicted by a competent criminal Court for the offence of forgery under Sections 406, 420 read with Section 506 of the Indian Penal Code 1860, committed on 2nd August 2011. The plaintiff no. 1 was arrested on 26th June 2012 and charge sheet was filed on 18th June 2013.
D. The plaintiff no-10 was thereafter convicted of the said offences and was directed to suffer imprisonment for one year and 6 months for each of the offences committed under Section 406 and 420 of the Indian Penal Code respectively by a judgment dated 27-02- 2024. Moreover the said plaintiff was directed to pay a sum of Rs. 35,00,000/- to the defendants towards compensation within three months from the date of passing of the judgment in default of which would further entail imprisonment of 6 months.
E. The plaintiff however has filed an appeal from the said order and refused to pay the compensation awarded to the defendants. Accordingly the, plaintiff No. 10 is using this present proceeding as a bait and a bargaining mechanism to wriggle out of the compensation awarded to the defendants.
F. The continuation of the suit at the behest of plaintiff no-10 in the light of the overwhelming majority having settled the matter is nothing but an abuse of process and deserves to be deprecated and absolutely contrary to partnership principles.
The defendants have also denied the other contentions made by the plaintiff no-10/petitioner. The defendants have further denied that the petitioner is not aware of any settlement as alleged and have denied that the defendants have acted in collusion and connivance with plaintiffs no. 1 to 9, and 11 to 14. The defendants have also denied that order dated 2nd May 2025 should be recalled.
With regard to the statements made in Affidavit in opposition by the Defendants and plaintiffs no-1 to 9 and 11 to 14 the petitioner/plaintiff no- 10 has denied the contentions made therein and have repeated and reiterated the statements made in the petition. The petitioner has contended that the purported settlement is absolutely prejudicial onerous and detrimental to the interest of the partnership firm. The same cannot be given effect to. It is further contended that the suit was withdrawn behind his back. It is also contended that the plaintiff no. 8 and 9 had maliciously avoided receiving notice dated 28-04-2025 sought to be served by the postal Department.
Heard Learned Advocate for the Petitioner/plaintiff no-10 and Learned Advocate for the plaintiffs no. 1 to 9 and 11 to 14 and Learned Advocate for the defendants. Perused the petition filed and materials on record. Learned Advocate for the petitioner submits that it is not in dispute rather it has been categorically admitted in both the Affidavits in opposition that all the plaintiffs did not agree to the decision of the withdrawal of the subject suit but the decision was purportedly taken by the alleged majority of partners.
Learned Advocate further submits that the partners had been informed by their erstwhile Learned Advocate about the categorical instruction of the petitioner that he was not inclined to withdraw the suit but to proceed with the same. Thereby the petitioner had revoked the authority of the plaintiff no. 9 if any, to withdraw the subject suit. As such, the plaintiff no. 9 was no more authorized or competent to withdraw the subject suit in any manner whatsoever. Learned Advocate also submits that prior to withdrawal of the suit it was known to other partners that the petitioner had filed Vakalatnama through his present Learned Advocate. Learned Advocate submits that under Section 12(c) of the said Act 1932 the conduct of the business subject to contract between the partners any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners and every partner shall have the right to express his opinion before the matter is decided, but no change may be made in the nature of the business without the consent of all the partners.’
Thus it appears that the majority of the partners may take a decision however subject to the following 2 conditions:
i) Ordinary matters connected with the business.
ii) In the usual course of business.
In the instant case it would appear from cl. 3 of the partnership Deed that the business of the plaintiff partnership Firm is to generate rental income from the properties wherein it has right title and/or interest. It is submitted that there is no dispute that the plaintiff partnership firm is a Lessee in respect of the said 2 two godowns. It has been enjoying the leasehold right since 1934. By reason of withdrawal of the subject suit the plaintiff Firm will lose its possession in the suit property and thereby it would not be in a position to generate rental income which is the business, of the firm by exploiting the suit property anymore in future. Learned Advocate submits that Section 9 of the said Act of 1932 provides that the partners are bound to carry on the business of the firm to the greatest common advantage and are to be just and faithful to each other and additionally terms of Section 19(2) (d) of the said Act of 1932 categorically provides that the implied authority of a partner does not empower him to withdraw a suit filed on behalf of the firm.
Learned Advocate further submits that any settlement is essentially a contract and accordingly there should be some consideration to both the parties but here it would appear that the defendants got both the property and the money without making over anything to the plaintiffs or the plaintiff partnership Firm. Thus the Terms of settlement is void ab initio.
Learned Advocate also submits that in 2020, the plaintiff no. 9 had already alienated his shareholding in the firm in favour of plaintiff no. 11 and thereby he lost his right to remain and/or to act as partner. In 2016 the plaintiff no.8 had already alienated his shareholding in the firm in favour of the plaintiff no. 11 and thereby he lost his right to remain and/or to act as partner.
Learned Advocate draws attention to the notice dated 28-06-2023 and notice dated 12.12.2023 and his letter dated 05-07-2023 and 12-12-2023 challenging the authority of plaintiff no-9 and plaintiff no-8 to call a meeting and submits that his letters were not taken into consideration and replied to.
Learned Advocate submits that no notice was served on the petitioner which would appear from the recording of the minutes of the Meeting dated 28-12-2023, and Meeting dated 01-02-2024. The petitioner/plaintiff no-10 was neither notified nor was aware of the meeting allegedly held. Learned Advocate further submits that any decision including any decision allegedly taken on 01.02.2024 for withdrawal of the suit is not binding on the petitioner. Learned Advocate also submits that the plaintiff no. 9 with aid and assistance of a few other plaintiffs and acting in collusion with the defendants had surreptitiously and wrongfully withdrawn the subject suit. The decision is prejudicial and onerous to the interest of the partnership firm, thus the application of the plaintiff no-1/petitioner should be allowed.
Learned Advocate for the plaintiff no-1 to 9 and 11 to 14 submits that the plaintiff no. 10 was not only aware of the steps being taken towards a settlement in the present suit but also chose either deliberately or negligently not to participate meaningfully in the proceedings, despite having sufficient knowledge of the plaintiff’s intention to compromise the suit and the changes in legal representation.
Learned Advocate draws attention to the following events in connection with the dispute.
a. March 13, 2025; The plaintiffs by a letter dated March 13, 2025 addressed to their erstwhile Advocates-on-Record, Chatterjee and Sil, requested them not to act on their behalf any further. The plaintiffs subsequently engaged Mr. Anirudya Dutta, Learned Advocate to represent them in the present proceedings.
b. March 20, 2025; plaintiff No. 10 appears to have allegedly issued a letter dated March 20, 2025.
c. April 25, 2025: plaintiff No. 10 also relies on an e-mail dated April 25, 2025, sent by Bharadwaj Law Chambers (the advocates presently engaged by plaintiff No. 10) asserting that they have entered appearance in the suit and requesting M/S. Chatterjee and Sil to cease acting. The communication was shared with or communicated to the other plaintiffs.
d. April 28, 2025: plaintiff No. 10 further relies on a purported letter dated April 28, 2025 [Pg. 209-210] allegedly addressed to all plaintiffs and defendants, stating that he would henceforth be represented separately. Plaintiff No. 10 intentionally caused this notice to be issued to incorrect addresses of partners despite having knowledge of the current addresses. This was done with mala fide and ulterior motives.
1) The Constituted attorney of the plaintiffs, i.e, plaintiff No. 9. did not receive the said notice [Pg. 237 of the application]
2) Plaintiff No. 8 also did not receive the said letter [Pg. 234 of the application]
3) The others plaintiffs [partners] received the said notice only on May 1, 2025 after 5 P.M. [Pgs. 236, 238, 239, 240 of the application].
4) Plaintiff No. 10 further caused the notice to be served on Pinaki Ray plaintiff no-5 [Pg. 212 of the application] who is allegedly deceased.
April 30, 2025: Due to the refusal of the erstwhile advocates to issue a no-objection in favour of the newly appointed counsel, the plaintiffs, approached this Hon’ble Court on April 30, 2025 seeking leave to file a Vakalatnama without such no-objection. This was done under instructions from plaintiff No. 9, the constituted attorney duly authorized by all partners. Accordingly the Vakalatnama was filed on April 30, 2025.
May 2, 2025: The matter was listed on May 2 2025, as reflected in the cause list. All parties, including the erstwhile advocates were present before the Hon’ble Court and stated their respective positions. Plaintiff No. 10 and his newly appointed counsel however deliberately chose not to appear. The terms of Settlement were filed by the constituted attorney, plaintiff No. 9 who was and continues to be authorized by all partners including plaintiff No. 10.
e. May 2, 2025: The suit was accordingly disposed of on May 2, 2025 in terms of the settlement.
f. Plaintiff No. 10 was therefore well aware that steps were being taken to settle and compromise the present suit.
g. All plaintiffs including plaintiff No. 10 had authorized plaintiff No. 9 (Shomshankar Mukherjee) through a power of attorney to represent them and take all necessary steps on their behalf This power of attorney is still in vogue.
h. On the date of compromise ie. May 2, 2025 the advocates engaged by plaintiff No. 10 chose not to appear despite allegedly being aware of the firms intent to compromise the suit. The erstwhile Advocate-on-Record though present did not clarify the position of plaintiff No. 10 before the Hon’ble Court.
i. Plaintiff No. 10 with an apparent intent to frustrate the settlement has deliberately sent communications to incorrect addresses of plaintiff No. 9 (Shomshankar Mukherjee) despite knowing his correct address.
1. May 6, 2025: Plaintiff No. 10 only took action after the suit had already been disposed of as evident from the documents at Pg- 241-244 of the application.
Learned Advocate further submits that plaintiff No. 10 was fully aware that a settlement was being negotiated between the plaintiffs and the defendants and plaintiff No. 10 chose not to participate in any of these meetings and deliberately refrained from asserting any objections at the relevant time.
Learned Advocate draws attention to Letters dated 28.06.2023 issued by Shomshankar Plaintiff no-9 to all partners calling for a meeting of the partners, dated 30.06.2023, a letter of reply by plaintiff no-10 to letter dated 28.06.2023, further letter dated 05.08.2023 addressed by plaintiff no. 10 to plaintiff no-9 letter dated 30-11-2023 addressed by Sonali Ray (on behalf of the partnership firm) to all partners that plaintiff no-10 is reluctant for making payment towards salaries and other expenses, and Minutes of Meeting dated 16.12.2023, 28-12-2023 and 01.02.2024 and submits that the plaintiff no-10 was well aware about settlement and steps for withdrawal of suit but deliberately refrained from asserting any objections at the relevant time.
Learned Advocate also submits that plaintiff No-10 was not present or represented in Court on May 2, 2025, when a fresh Vakalatnama was filed on the date the suit was withdrawn. Furthermore, plaintiff no-10 has not revoked the power of attorney previously granted in favour of plaintiff No. 9. As a result, the action taken by plaintiff No. 9 under the instruction and on behalf of the partnership firm and the other partners including the withdrawal of the suit remain binding on plaintiff No. 10 who is deemed to have acquiesced by failing to revoke the authority or raise any objection before the court.
Learned Advocate relies upon the following Judicial Decision.
House Limited Agency VS Paints and Lecquers. Ltd.
Reported in AIR 1954 Cal 409.
Learned Advocate for the Defendants submits that pursuant to proposal received on behalf of the partnership firm through the plaintiff No. 9, the Defendants proceeded with bona fide intention to resolve dispute with all partners and continuation of amiable relation with the parties. Learned Advocate further submits that the Defendants are not aware of the internal management of the plaintiffs. In any event the partners are bound as per Section 12 (c) of the Indian Partnership Act 1932 based on the majority decision of the partners of the firm.
Learned Advocate also submits that the plaintiff no-10 is trying to sabotage the settlement from the personal Vendetta against Defendant no-3 as the plaintiff No-10 has been convicted by the Learned Metropolitan Magistrate 14th Court Calcutta in case No-2974/2011 on the complaint of the Defendant no-3.
Learned Advocate draws attention to letter dated 13th March 2025 at Pg. 185 of the application and submits that the plaintiffs had decided not to proceed with the suit but no notice was issued to the Defendants by plaintiff No-10 that he has some objection.
Learned Advocate further submits that the matter was listed on May 2, 2025 but the Learned Advocate for the plaintiff no-10 did not appear to submit the objection. Learned Advocate also submits that the plaintiff No. 10 on the face of the application has failed to establish any grounds rendering Terms of Settlement dated 2nd May 2025 as inoperative and not binding.
Before proceeding to decide the material in issue it is necessary to consider the provisions contained in Order XXIII Rule 1 Sub Rule 5 of the Code of Civil Procedure, and Rule 3 Order XXIII of the Code of Civil Procedure and relevant provisions of the Partnership Act 1932.
Sub-Rule 5 of Rule 1 Order XXIII of the Code of Civil Procedure provides that nothing in this rule shall be deemed to authorise the Court or permit one of several plaintiffs to abandon a suit or part of a claim under Sub-rule (1) or to withdraw under sub-rule (3) any suit or part of a claim without the consent of the other plaintiffs.
Rule 3 of Order XXIII CPC provides as follows:
Rule-3 Compromise of suit – Where it is proved to the satisfaction of the court that a suit has been adjusted wholly or in part by any lawful agreement or compromise [in writing and signed by the parties] or where the defendant satisfied the plaintiff in respect of the whole or any part of the subject matter of the suit the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith [so far as it relates to the parties to the suit whether or not the subject matter of the suit] agreement compromise or satisfaction is the same as the subject matter of the suit.
Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question but no adjournment shall be granted for the purpose of deciding the question, unless the Court for reasons to be recorded thinks fit to grant such adjournment.
Explanation – An agreement or compromise which is void or voidable under the Indian Contract Act 1872 (9 of 1872) shall not be deemed to be lawful within the meaning of this rule].
Section 12 of the Indian Partnership Act 1932 provides as follows:
12. The conduct of the business-Subject to contract between the partners-
a) every partner has a right to take part in the conduct of the business;
b) every partner is bound to attend diligently to his duties in the conduct of the business;
c) any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners and every partner shall have the right to express his opinion before the matter is decided, but no change may be made in the nature of the business without the consent of all the partners and
d) every partner has a right to have access to and to inspect and copy any of the books of the firm.
Section 19 of the Indian Partnership Act 1932 provides as follows:
Section 19 Implied authority of partner as agent of the firm-1) subject to provisions of Section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm binds the firm.
The authority of a partner to bind the firm conferred by this Section is called his ‘implied authority.’
2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to:-
a) submit a dispute relating to the business of the firm to arbitration,
b) open a banking account on behalf of the firm in his own name.
c) compromise or relinquish any claim or portion of a claim by the firm.
d) Withdraw a suit or proceeding filed on behalf of the firm.
e) Admit any liability in a suit or proceeding against the firm,
f) acquire immovable property on behalf of the firm,
g) transfer immovable property belonging to the firm or,
h) enter into partnership on behalf of the firm.
Upon bare reading of the provision contained in Rule 1(5) of Order XXIII of the Code of Civil Procedure it will appear that a plaintiff, may withdraw the suit against any or all the defendants or abandon a part of the claim, but when there are more than one plaintiffs it is not absolute right of a plaintiff to withdraw a suit without consent of the other plaintiffs. Thus it cannot be said that Court is authorized to permit one of the plaintiffs to withdraw a suit without the consent of the other plaintiffs.
Now in the case of suit by partners of a firm whether sub- Rule-5 of Rule 1 of Order XXIII of Code of Civil Procedure is applicable is to be considered from certain Judicial decisions.
Learned Advocate for the plaintiffs no. 1 to 9, and 11 to 14 has relied upon the case of House Ltd. Agency VS Paints and Lecquers Ltd. reported in 1953 SCC Online Cal-27.
In the said case this Hon’ble Court observed as follows:
24. In the present case before me there is no allegation of any fraud or collusion as between the majority of the partners and the defendant company. So far as sub-cls. (c) and (d) of Section 19(2) of the Partnership Act are concerned, it is clear in this country that there is no implied authority any more after this Statute, for one partner to compromise or relinquish any claim by the firm or to withdraw a suit or proceeding filed on behalf of the firm. To that extent the observations just quoted from Lindley are not applicable in India. But then as I have said before that sub-cls. (c) and (d) of Section 19(2) of the Partnership Act cannot be interpreted to mean a prohibition on the majority of partners to act under Section 12(c) of the Partnership Act and under an express contract of partnership providing that in case of any difference their opinion shall prevail, and so to discontinue the suit initiated by one partner in the name of the firm without the consent and against the wishes of all other partners.
This Hon’ble Court further observed as follows:
‘28. It must be emphasised that by Section 18 of the Partnership Act it is distinctly laid down that the partner is an agent of the firm for the purposes of the business of the firm subject to the provisions of the Act. It is in my view a part of business of the firm to decide whether certain dues to the firm have become recoverable from third parties and whether such dues should be recovered by litigation. If therefore the suing partner’s agency is denounced by the majority of the partners to sue on behalf of the firm then the action should not be allowed to proceed. Subject to contract between the parties, Section 12 of the Partnership Act provides in sub-Cl. (c) that any difference arising as to the ordinary matters connected with the business may be decided by the majority of the partners. In my view whether an action should be brought to recover dues owing to the firm is ordinarily connected with the business of a firm. This majority principle is ingrained in the very nature of partnership apart from the specific agreement in the Articles of Partnership in this case.’
Upon considering the decision relied by the Learned Advocate and the provisions contained in Order XXIII Rule 1(5) of the Code of Civil Procedure and the provisions contained in Section 12 C of the Indian Partnership Act this Court is of the view that the facts of the case relied upon differs from the present case. In the case of House Limited Agency (supra) a suit was instituted by one of the partners without consulting other partners, thus the other partners decided in a meeting to withdraw the said suit for the interest of the firm. Moreover the partner who instituted the suit resigned from the day to day administration of the agency business prior to institution of the suit and another partner was entrusted in the management of the firm. Further in the said partnership Firm there was an agreement that in case of difference of opinion at any time during the continuance of the partnership the opinion of the majority shall prevail. In the instant case there is no specific provision that in case of any difference the majority decision should prevail irrespective of the provision contained in Section 12(c) of the Indian Partnership Act 1932, thus restriction in Section 12(c) of the Act is applicable. This Hon’ble Court in the case of House Ltd. Agency was pleased to hold that suit for recovery of dues owing to the firm is ordinarily connected with the business of a firm, and in the said matter a terms of settlement was being worked out for realising the dues from the defendant by instalments for the interest of the Firm and the defendant. The instant suit is not for recovery of debts and according to the plaintiff no-10 the withdrawal of the suit by entering into a settlement with the defendants will virtually amount to closing of part of partnership business, thus the restriction clause in Section 12(c) of the Partnership Act regarding change of business will apply. Above all it will appear from the decision relied upon by the Learned Advocate that in the said case prior to withdrawal of suit the partner who instituted the suit was given an opportunity of being heard and the application was on a chamber summons setting out the true picture of the facts but in the instant case true facts were not presented before the Court, by way of application. In the instant case no application was filed by the plaintiff no. 9 who claimed to be holding power of attorney on behalf of other plaintiffs. It was incumbent upon the plaintiff no. 9 to move an application and state the material facts in connection with the withdrawal of the suit with service of copy upon the plaintiff no. 10 who did not attend the meeting for withdrawal of the suit and who has objected to the withdrawal of the suit and locus standi of plaintiff no-9 as such fact was known to some of the plaintiffs including plaintiff no. 9. Plaintiff no-9 without disclosing the necessary facts of plaintiff no-10 challenging his locus standi to call meeting with regard to the withdrawal of the suit, the plaintiff no. 9 filed the terms of settlement purported to be entered into between all the plaintiffs and the defendants. It further appears from the record that prior to execution of the terms of settlement the plaintiff no. 5 died but the plaintiff no. 9 also represented him by power of attorney when the power of attorney has no force when the person who issued the same is dead. It is true that when a decision is taken by the partnership firm with regard to ordinary course of business the majority of the decisions of partners prevail but when a suit is sought to be withdrawn by majority of the plaintiffs partners the Court may not pass Order mechanically by permitting withdrawal of suit unconditionally as courts have duty to see with discerning eyes on the bona fide of the persons seeking to withdraw the suit and the plaintiff who did not give consent for such withdrawal. In this regard it is necessary to rely upon some judicial decisions although the said decisions are not relied upon by the parties.
In the case of Nunu Singh VS Muni Nath Singh and others reported in AIR 1954 Patna page 314 the Hon’ble Court observed as follows:-
‘8. According to sub-rule (1) of this rule, the plaintiff may “withdraw his suit or abandon part of his claim” after the institution of the suit. Sub-rule (2) says that the Court may allow the plaintiff “permission to withdraw from such suit or abandon such part of a claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of a claim” if the Court is satisfied that the suit was bound to fail by reason of some formal defect or for some other sufficient ground. Sub-rule (3) refers back to sub-rule (2) and empowers the Court to award such costs as it thinks fit against the plaintiff if he withdraws from the suit or abandons part of the claim without the permission referred to in sub-rule (2), and it further says that the plaintiff shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim. Sub-rule (4) says that nothing in that rule shall be deemed to authorise the Court to permit one of several plaintiffs to withdraw without the consent of the other plaintiffs.
9. The question is whether sub-rule (1) of Rule 1 is subject to subrule (4) and whether in all cases one of several plaintiffs cannot withdraw from the suit without the consent of the other plaintiffs. The language used in sub-rule (1) is different from the language used in sub-rule (2). Sub-rule (1) is absolutely unconditional and it entitles ‘the’ plaintiff to withdraw ‘his’ suit or abandon part of ‘his’ claim. Sub-rule (2), on the other hand, enables the plaintiff to withdraw from such suit or abandon such ‘part of a claim.’ The important words have been underlined (here in ‘’) by me. As sub-rule (1) is worded, the Legislature puts no fetters upon the plaintiff to withdraw his suit. The plaintiff if he likes can withdraw his suit or abandon part of his claim, without any hindrance and no permission is needed if the plaintiff withdraws his suit or abandons part of his claim.” The expression ‘the plaintiff’ must mean sole plaintiff or the entire body of plaintiffs. If the sole plaintiff or the entire body of plaintiffs withdraw his or their suit or abandon part of his or their claim, no permission of the Court is needed. If, on the other hand, the plaintiff desires to withdraw the suit or abandon part of his claim with liberty to institute a fresh suit in respect of the subject-matter of the suit or such part of the claim, he is to obtain the permission of the Court under sub-rule (2) and the permission can be given on such terms as the Court thinks fit and proper.
Sub-rule (3) says that if the plaintiff withdraws, in circumstances referred to in that sub-rule, without the permission of the Court, he shall be liable for costs and shall further be precluded from instituting any fresh suit in respect of the same subject-matter or such part of the claim. Sub-rule (4), which immediately follows sub-r, (3), adds another obstacle in the way of the plaintiff if there are more than one plaintiff in the suit, and there could be no withdrawal from the suit without the consent of the other plaintiffs. If there are more plaintiffs than one and if some of the plaintiffs want to withdraw from the suit without the liberty to institute a fresh suit in respect of the same subject-matter or such part of the claim, such a case is not covered by any of these sub-rules. The present case is one such. In this case, the petitioner wants to withdraw from the suit without liberty to institute a fresh suit in respect of the same subject-matter. His case, therefore, is not covered by Rule 1 of Order 23, Civil P.C. There is, therefore, no provision in the Code to cover case like the present one and the Court has to act under its inherent powers. If the Court has to invoke its inherent powers, it is also entitled to impose such conditions as the circumstances of the case require.
10. As I read these sub-rules of Rule 1, in my judgment, sub-rule (4) does not govern sub-rule (i) which was for the first time brought into the Statute Book in 1908; the sub-rules (2) to (4) were already there even in the Code of 1882; and that in a case where one of the several plaintiffs desires to withdraw from the suit without the liberty to bring a fresh suit in respect of the subject-matter of such suit or such part of the claim, such a case is outside the provision of Order 23, Rule 1. I am amply supported in the view which I have taken of these sub-rules of Rule 1 by a long line of cases of Sundar’, AIR 1943 Cal 427 (A). This Calcutta case has reviewed all the previous decisions of the different High Courts, and it is not necessary for me to reconsider those cases. Both parties relied upon this case.
11. Mr. P. R. Das, appearing on behalf of the opposite party, supported the order moved against, but, upon the authority of this case, he submitted that in suitable cases, as was held in the above noted case, one of the several plaintiffs, who wants to withdraw from the suit, may be added as a party defendant to the action as was done in several cases in this country which were referred to in the Calcutta case. Mr. Lal Narayan Sinha, appearing on behalf of the petitioner, welcomed the suggestion of Mr. Das and he agreed that the petitioner should be added as a defendant to the suit. In this view of the matter, it is not necessary to seriously consider the argument of Mr. Das that, as there was no question of jurisdiction, this Court should not interfere with the order passed. As I have already indicated, the Learned Munsif has not considered the implications of the sub-rules of Rule 1 of Order 23, and, if it was necessary to hold, I should have found that the Court below, in exercise of its jurisdiction, has acted with grave and material irregularity in rejecting the application of the petitioner on the grounds mentioned by it. In the circumstances, aforesaid, I would allow the application and direct that the petitioner Nunu Singh be removed from the category of plaintiff and be added as a defendant to the suit pending before the Learned Munsif at Barh.
In the case of Baidyanath Nandi VS Shaymasundari Nandi reported in AIR-1943 Cal-427 this Hon’ble Court observed as follows:-
‘All persons may be joined in one suit as plaintiffs in whom any right to relief in respect of or arising out of the same act or transactions is alleged to exist whether jointly, severally or in the alternative, where if such persons brought separate suits, any common question of law or fact would arise.
The sub-rule gives a plaintiff right to withdraw only his suit or abandon his claim. This can be done only by the entire body of the plaintiffs when they allege that the right to the relief exists in them jointly. The suit and the claim in such a case are the suit and the claim of these plaintiffs collectively. But as persons may join in one suit as plaintiffs even when they claim severally or in the alternative, their several or alternative reliefs will be their own respective suits or claims and they will be entitled to withdraw or abandon them under this Sub-rule (1). No leave of the Court will be needed for this purpose. In this view, no right of withdrawal is given by this rule to some of the plaintiffs in a case where they allege the right to the relief as existing in them jointly without the leave of the Court. Even the Court''s power under the rule is limited to the case of withdrawal with liberty to bring a fresh suit. When such liberty is not sought for, the Court is not authorized by the rule to allow withdrawal. It is only in exercise of its inherent power that the Court can move in the matter.
When therefore such a plaintiff wants to withdraw without such liberty his only remedy is to invoke the inherent power of the Court. The exercise of this inherent power is not hampered by the provisions of this rule. But certainly all considerations of justice and prejudice will be open to it while called upon to exercise its inherent power. The consent of the other plaintiffs in. such a case is not at all required. Sub-rule (1) has no application here. The consent is material only so far as the consideration of their prejudice is concerned. If they are sui juris and give their consent, the Court need not trouble itself with the question of their prejudice. Still the question of prejudice and harassment of the defendants remains and before exercising the inherent power in favour of withdrawal the Court will weigh them properly. The views I have taken may thus be summarised:
(1) That Order 23, Rule 1, Sub-rule (1) exhaustively deals with the cases where the plaintiff can as of right withdraw his suit or abandon part of his claim; (A) that the use of the word ''his'' with the words ''suit'' and ''claim'' is significant; the sub-rule must be read with Order 1, Rule 1, Civil P.C. which provides for the joinder of the plaintiffs; (i) that when the persons are joined in one suit as plaintiffs alleging that the right to relief exists in them severally or in the alternative, then (a) any of them having the several right to the relief according to the allegations made in the plaint will have right to withdraw his several claim under Sub-rule (1), (b) any of them having the right to the relief in the alternative according to the allegations made in the plaint will have right to withdraw his claim in the alternative under Sub-rule (1); (ii) but when and so far as the persons join as plaintiffs alleging that the right to relief exists in them jointly all these persons collectively will be the plaintiffs and the suit and the claim will be theirs jointly within the meaning of the sub-rule. The sub-rule will apply only when they withdraw or abandon collectively; (a) that no leave or permission of the Court is required if and when the plaintiff wants to; withdraw in exercise of the right given to him in this respect by Sub-rule (1); (i) that the only power of the Court in such a case of withdrawal is to award costs against the withdrawing plaintiff under Sub-rule (3), (ii) that the legal consequences of such withdrawal will be that the withdrawing plaintiff shall be precluded from instituting any fresh suit in respect of the same matter; (b) that if a plaintiff'’s case is not covered by Sub-rule (1) he shall have no claim to withdraw or abandon the suit or claim as of right; but this does not curtail the inherent power of the Court, to allow such withdrawal.
2. That Sub-rule (2) is the only provision empowering withdrawal with liberty to institute a fresh suit : (a) such withdrawal can be made only with the permission of the Court, (b) Court''s power to permit such withdrawal is limited (i) by the grounds specified in Sub-rule (2), (ii) by the provision of Sub-rule (4), (c) exercise of this power is discretionary with the Court. [N.B. : Besides the provisions contained in Sub-rule (2), the Courts in India have no power to non-suit a plaintiff with the consequence of entitling him to bring a fresh suit in respect of the same matter.]
3. That Sub-rule (4) applies only to the cases under Sub-rule (2): (a) that sub-rule applies to all the cases of several plaintiffs when any of them wants to withdraw with liberty to bring a fresh suit; (i) Court cannot permit without the consent of the other plaintiffs, (ii) consent being given, Court can still refuse to permit on other consideration: Sub-rule (2) does not oblige the'' Court to permit. It simply empowers it to grant such permission: exercise of the power under the sub-rule is discretionary with the Court.
In the present case the petitioners wanted to withdraw from the entire suit. According to the allegations in the plaint the right to some of the reliefs claimed in the suit exists in the plaintiffs neither severally nor in the alternative, but jointly. This is the position at least so far as the question of removal of defendant 1 by the Court is concerned. In the view that I have taken of the meaning and scope of Sub-rule (1) of Rule 1 of Order 23, Civil P.C. the petitioners cannot, as of right, claim to withdraw from this suit. As no liberty to bring a fresh suit was sought for, the power conferred on the Court by Rule 1 excepting its power to award costs under Sub-rule (3) could not be exercised. In such a case the only course left to the petitioners was to invoke the aid of the Court in exercise of its inherent power. The Court in exercise of that power refused to allow them to withdraw from the suit as, in its opinion, such withdrawal might prejudice the right of the other plaintiffs to continue the suit successfully. The materials placed before us do not entitle us to say that in thus refusing leave to withdraw the Court has committed any error.’
The term ordinary course of business varies from case to case thus whether the Act of the partners is in the ordinary course of business varies in different case. Thus the Court while considering the prayer to withdraw a suit may also decide as to whether the act of the plaintiffs/partners is in the ordinary course of business or otherwise. As the plaintiffs no. 1 to 9 and 11 to 14 have claimed that suit is compromised by entering into terms and settlement it is also necessary to consider the provisions of Order 22 Rule 3 to ascertain as to whether any type of compromise entered into between parties should be accepted by the Court without going into its legality. Rule 3 Order 22 CPC provides that where it is proved to the satisfaction of the Court that the suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties or where the defendant satisfies the plaintiff in whole of any part of the subject matter of the suit the Court shall order such agreement compromise of satisfaction to be recorded and shall pass a decree in accordance therewith. The explanation to Rule 3 provides that an agreement or compromise which is void or voidable under the Indian Contract Act 1872 shall not be deemed to be lawful within the meaning of this Rule. In the instant matter although there is no compromise decree passed in this suit but the Court has every duty to see as to whether the terms of settlement entered between the parties and filed in Court is lawful and whether on the basis of the terms of settlement which is filed in Court the plaintiffs should be permitted to withdraw the suit. Order dated 2nd May 2025 was passed permitting withdrawal of the suit and treating the suit to be disposed. As contended by the plaintiff no. 10 that the terms of settlement entered into by the plaintiff no. 9 on behalf of all the plaintiffs with the defendants does not provide any consideration and terms to be complied by the defendants on the basis of which the settlement is arrived at thus this terms of settlement should not be treated to be lawful agreement and compromise under Order 23 Rule 3 of the Code of Civil Procedure. Upon perusal of the terms of settlement it appears that the plaintiffs no. 9 on behalf of all the plaintiffs and by virtue of the power of attorney has agreed to withdraw the suit unconditionally and thus gave the right to the defendant to use the suit property without any consideration. It further appears that in the terms of compromise there is no mention with regard to the amount deposited by the defendant by virtue of earlier Orders. In view of the terms of settlement which does not provide for any condition nor any consideration nor does it mention anything with regard to the amount deposited by the defendants the Court may look at such terms of settlement entered into by the plaintiff no. 9 with the defendants without express consent of the plaintiff no. 10 with suspicion and within the restrictions of Rule 3 Order 22 of the Code of Civil Procedure. In this regard it would be reasonable to refer judicial decision with regard to the terms of compromise.
In the case of Chand Kaur VS Raj Kaur Reported in AIR 1997 Punjab and Haryana page 155 the Hon’ble Court observed as follows:-
“10. Consistent views taken by various Courts by now have clearly spelled the conditions which normally must be satisfied for validly invoking the provisions of Order 23. Rule 3 of the Code and for passing of such a decree, which are as under:-
(i) There should be a lawful agreement or compromise;
(ii) This compromise has to be in writing and signed by the parties;
(iii) The compromise must be recorded by the Court;
(iv) A decree on such compromise can be passed so far it relates to the parties to the suit but may extend to a special matter which is not the subject-matter of the suit.
The Court has to record its satisfaction with regard to adjustment of the whole or part of the claim in terms of such lawful compromise.
11. The explanation to sub-rule (3) of Rule 23 of the Code further makes legislative intent more clear by specifying that an agreement or compromise which is void or voidable under the Indian Contract Act 1872 shall not be deemed to be lawful within the meaning of the rule. The purpose of effecting a compromise between the parties is to put an end to the various disputes pending before the Court of competent jurisdiction fully and finally.
12. Finality of decisions is an underlying principle of all adjudicating forums. Thus creation of further litigation should never be the basis of a compromise between the parties. Rule 3(a) of Order 23 of the Code further provides that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The scheme of Order 23, Rule 3 of the Code is to avoid multiplicity of litigation and permit parties to amicably come to a settlement which is lawful, is in writing and a voluntary act on the part of the parties. The Court can be instrumental in having an agreed compromise effected and finality attached to the same. The Court should never be party to imposition of a compromise upon an unwilling party.
13. In the present case the Court had proceeded against some of the defendants ex parte on the same day and immediately proceeded to pass a decree on the alleged compromise, which definitely prejudicially-affected the rights and contentions of the said defendants. A compromise decree has to be between the parties to the suit and the Court must apply its mind and use its judicial discretion if the case is otherwise. Obviously the suit was being contested by different sets of defendants, and compromise between some of them adversely affecting the rights of another set of defendants, had to be looked into by the Court with caution. Compromise between some of the parties to the suit and prayer for passing of a decree effecting rights of all, the Court had a discretion to accept or reject such a request. In fact in some of the cases where partial compromise would be prejudicial to the interests of the parties not joining such a compromise, the Court has gone to the extent of holding that such compromise cannot be recognised. In this regard reference can be made to Smt. Rani Bai v. Yadunandan Ram, AIR 1969 SC 1118: (1969 All LJ 988) and Gopika Raman Roy v. Atal Singh, AIR 1926 Calcutta 193 (DB).”
Upon considering the facts of the case and the judicial decisions referred above this Court is of the view that first of all due procedure was not followed by the partners of the firm being plaintiff no. 1 to 9 and 11 to 14 and specially plaintiff no. 9 by not moving the application for withdrawal of the suit and by serving copy of the application upon plaintiff no-10 by disclosing all material facts. This Court upon representation of the plaintiffs that the matter has been settled permitted the plaintiffs to withdraw the suit unconditionally when certain material fact affecting the decision of the matter was not brought to notice of this Court. Secondly the terms of settlement relied upon by the plaintiffs no. 1 to 9 and 11 to 14 in the opinion of this Court cannot be relied as the said does not comply the conditions of valid compromise under Rule 3 Order 23 of the Code of Civil Procedure. Moreover it is also entered on behalf of plaintiff no-5 who is dead. Thus the Order date 02/05/2025 should be recalled by allowing this application.
Let there be an Order in terms of prayer a and b of the notice of motion dated 14th May 2025. The suit which was dismissed for nonprosecution by order dated 02/05/2025 is restored to file. However in order to expedite the matter in the interest of justice the Court is of the view that Special Officer should be appointed to resolve the disputes between the parties with regard to terms of settlement in accordance with Law. Thus Mr. Nara Narayan Ganguly Advocate Ph-9830620014 and Ms. Rajarshi Mukherjee Advocate Ph-8777291292 are appointed as Special Officers. Learned Special Officers shall upon notice to all the plaintiffs and also their Learned Advocates hold a meeting and in the said meeting if the dispute between the plaintiffs is resolved by discussion Learned Special Officers shall record the same and the plaintiffs will be at liberty to take necessary steps in accordance with Law for withdrawal or settlement of the suit. In the event the dispute cannot be settled by Learned Special Officers the Learned Special Officers shall upon discussion with the plaintiffs fix a date and time of meeting to be held by the plaintiffs amongst themselves in which the issue regarding withdrawal or settlement of the suit shall be discussed and steps be taken in accordance with Law. The Learned Special Officers shall also be entitled to appoint one of the partners who shall preside the said meeting of the plaintiffs. The presiding Officer of the meeting to be appointed may be any partner but other than the plaintiff no. 9 and 10. In the meeting to be held by the Learned Special Officers both the plaintiffs’ advocates and the plaintiffs may be present but in the meeting to be held by the plaintiffs/partners with regard to the issue of the withdrawal/settlement of the suit only the plaintiffs will be present. The meeting with plaintiffs shall be held by the Learned Special Officers within two weeks from the date of the communication of this Order. In the event any of the plaintiffs is unable to be present in the meeting before the Special Officer he may send his Learned Advocate to represent him. But in the meeting to be held by the plaintiffs with regard to the issue of withdrawal of the suit where any of the plaintiff is unable to make himself present he has to give his views in writing to the presiding Officer of the meeting in advance. In the said meeting other than the plaintiffs none shall be present. Upon the meeting being held the plaintiffs shall intimate the Learned Special Officers forthwith in writing. The Learned Special Officers shall upon the meeting of plaintiffs being concluded file a report before this Court on or before, 5-01-2026. The report shall be filed before the regular bench having determination. As it appears that one of the plaintiff is dead steps shall also be taken in accordance with Law. Learned Special Officers are entitled to a remuneration of 700 GM each. 50% to be paid by plaintiff no-10 and 50% by remaining plaintiffs.
Fix 05/01/2026 for filing report.
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