Telangana High Court
M/S. Vishnu Oil Industries vs Sri Ramavtar Sarda on 6 April, 2026
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT
HYDERABAD
THE HONOURABLE SMT. JUSTICE RENUKA YARA
CITY CIVIL COURT APPEAL No.147 of 2024
06th DAY OF APRIL, 2026
Between:
M/s. Vishnu Oil Industries and three others.
...Appellants
AND
Sri Ramavtar Sarda and another.
...Respondents
JUDGMENT:
Heard Sri Bankatlal Mandhani, learned counsel for the appellants
and Sri K.K. Waghray, learned counsel for respondent No.1. Perused the
entire record.
2. The City Civil Court Appeal is preferred by the appellants/defendant
Nos. 1 to 4 aggrieved by the order and decree dated 11.03.2024 passed by
the learned XXV Additional Chief Judge, City Civil Court at Hyderabad,
(‘trial Court’) in I.A.No.393 of 2022 in O.S.No.479 of 2018, whereby a
petition filed under Order XII Rule 6 of CPC, to pass judgment and
preliminary decree dissolving appellant No.1-firm has been allowed with
costs in favour of respondent No.1 herein/plaintiff.
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CCCA_147_2024
Brief facts of the case:
3. In short, respondent No.1 herein filed suit for dissolution of
partnership firm and rendition of accounts against the appellants and the
respondent No.2 herein. In said suit, after filing of the written statement,
respondent No.1 filed the I.A.No.393 of 2022 under Order XII Rule 6 of
CPC, to pass a preliminary decree with respect to the dissolution of
partnership on the basis of admission made by the appellants in a reply
notice dated 19.03.2022 and paragraph No.13 of the written statement filed
on 02.11.2018.
4. Respondent No.1 pleaded that for the purpose of rendition of
accounts, I.A.No.1674 of 2018 was filed and a notice was given under
Order VII Rule 8 of CPC to the learned counsel for appellants to produce
income tax returns from the year 2010 onwards upto the year 2016 along
with balance sheet. Upon receiving said notice, the appellants herein have
sent reply on 19.03.2022 with a clear and categorical admission about
dissolution of firm i.e. appellant No.1. In the said reply, it is stated that
once a notice of termination was received from respondent No.1, since the
partnership is at will under Section 43 of Partnership Act, 1932
(‘Partnership Act‘), the partnership got terminated or dissolved and said
fact was communicated to the concerned authorities. There is a specific
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pleading that the partnership discontinued its business with effect from
01.04.2016. In view of said clear admission, according to respondent No.1,
a preliminary decree can be passed and therefore, the petition was filed
under Order XII Rule 6 of CPC.
5. The appellants opposed the I.A. under appeal referring to Section 42
of Partnership Act, which deals with dissolution by notice of partnership at
will. A partner can dissolve a firm by giving notice in writing stating his
intention to dissolve the partnership from a particular date. Respondent
No.1 got a legal notice dated 23.08.2015 issued determining the partnership
with effect from the date of receipt of notice. The said notice was received
by the appellants on 26.08.2015. At paragraph No.13 of the written
statement, there is a clear mention that appellant No.1 partnership firm was
dissolved when respondent No.1 got a legal notice issued, appellant No.1
firm stood closed with effect from 30.09.2015. The closure of the
partnership firm was informed to Commercial Tax Officer on 06.12.2016.
The suit was filed on 11.07.2018 and on said date appellant No.1 firm is
not in existence and therefore, it is the case of appellants that the suit ought
to be dismissed as not maintainable. The appellants denied the contents of
written statement being admission which can be acted upon under Order
XII Rule 6 of CPC. The income tax returns have been submitted to
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concerned authorities for the 2010 to 2016 and therefore, said relief is also
not maintainable. Appellant No.2 is the sole owner of all the immovable
properties claimed by respondent No.1 and said properties do not belong to
appellant No.1-partnership firm and therefore, the appellants sought
dismissal of the suit.
6. In that context, the learned trial Court considered the question as to
whether a preliminary decree can be passed based on admission made by
the appellants and allowed the petition. Aggrieved by the same, the present
City Civil Court Appeal is preferred.
Grounds of appeal:
7. In grounds of appeal, the appellants pleaded that there is complete
misreading of the judgment in the case of P. Venkateswarlu v. C.
Lakshmi Narasimha Rao 1 and misreading of Section 43 of Partnership
Act. The appellants contend that the partnership stood dissolved as on the
date of the filing of the suit immediately after receipt of notice of
dissolution and said fact was intimated to the taxing authority and
therefore, filing of the suit for dissolution of partnership after a long lapse
of time is itself not maintainable. The appellants denied making any clear
admission with regard to the claims raised by respondent No.1 in the suit.
1
AIR 2002 AP 62
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Further, it is emphasized that having allowed the petition, the learned trial
Court framed issues wherein the first issue is about entitlement of
respondent No.1 for passing of a preliminary decree for dissolution of
appellant No.1-firm and for allotment of one fifth the share in the assets of
appellant No.1-firm said issues are extracted and produced below:
“1. Whether the plaintiff is entitled for a preliminary decree for
dissolution of defendant No.1 partnership firm for distribution of
assets and whether the plaintiff is entitled for 1/5th share?
2. Whether the plaintiff is entitled to claim directions from the Court
directing the defendant Nos.2 to 5 to render the accounts as prayed
for?
3. To what relief?”
8. When the trial Court has passed a preliminary decree, on the basis of
admission of written statement there was no need for framing issue No. 1
with respect to entitlement of respondent No.1 for dissolution of
partnership. The appellants denied making any kind of admission either in
reply notice or in the written statement that can be appreciated as an
admission for passing decree under Order XII Rule 6 of CPC.
9. According to the appellants, the relief for dissolution of appellant
No.1 is totally misconceived contrary to Section 43 of Partnership Act and
therefore, the question of passing any judgment and decree does not arise.
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It is also emphasized that whenever a judgment is pronounced under Order
XII Rule 6 (1), a decree has to be drawn up with the judgment, but in this
case, no such decree is drawn up. Currently, as per the issues framed on
27.04.2024, the learned trial Court is poised to address the issue of
dissolution of partnership and therefore, the impugned order is liable to be
set aside. Lastly, it is pleaded that the trial Court has no jurisdiction to try
the suit as the same falls under the Commercial Courts Act, 2015 and the
Court lacks inherent jurisdiction and therefore, the decree passed is void ab
initio.
Contentions of the appellants:
10. The learned counsel for appellants argued that the reliefs sought in
the suit are misconceived and the suit itself is not maintainable. The suit is
not maintainable not only on merits, but the Court which passed the order
lacks inherent jurisdiction as the subject matter falls under the jurisdiction
of Commercial Courts. It is argued that appellant No.1 was a partnership
firm constituted under the Partnership Act, wherein, as per Section 43, any
partner who intends to dissolve the partnership at will, can issue a written
notice stating their intention to dissolve the firm and said intention has to
be communicated to all the other partners. Once such a written notice is
given, the firm shall cease to exist on the date mentioned in the notice or
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CCCA_147_2024from the date when such a communication is intimated to the remaining
partners of the firm. In the instant case, respondent No.1 intimated his
intention to dissolve the partnership firm i.e., appellant No.1 on
23.08.2015, expressing his intention to appellant Nos.2 to 4 and respondent
No.2, seeking dissolution of appellant No.1-firm and for rendition of
accounts.
11. It is argued that immediately after receipt of notice dated 23.08.2015,
the partnership stood dissolved and the said fact is communicated to the
taxing authorities i.e., the Commissioner of Commercial Tax vide letter
dated 06.12.2016. There is specific pleading to the effect that appellant
No.1 firm was closed with effect from 30.09.2015 and the same was
informed to the taxing authority on 06.12.2016. In that context, it is argued
that when the firm itself is not in existence on the date of filing of the suit
in the year 2018, the relief sought for dissolution of partnership itself is not
maintainable. Further, the prayer for rendition of accounts is also time-
barred and therefore, the entire suit is not maintainable. It is in that context
the pleadings of the written statement have to be read, but not in the form
of admissions.
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12. The learned counsel for appellants relied upon judgment in the case
of S.M.Asif v. Virender Kumar Bajaj2, wherein it is held that the word
‘may’ in Order XII Rule 6 of CPC suggests that the power under said
provision is discretionary and cannot be claimed as a right. The judgment
on admission is not a matter of right. When the defendants raised objection
which go to the root of the case, it would not be appropriate to exercise
discretion under Order XII Rule 6 of CPC.
13. Further, in the case of Hari Steel and General Industries Limited
v. Daljit Singh 3 , it is held that a mere admission of entering into
agreement/contract itself cannot be considered in isolation. Further,
objections raised by the contesting party have to be considered and
therefore, any conceding of fact cannot be termed as categorical and
unconditional for the purpose of delivering judgment by allowing an
application filed under Order XII Rule 6 of CPC.
14. On the basis of aforementioned judgments, the learned counsel for
appellants contended that there is a serious dispute to the plaint averments
and therefore, the pleading with respect to dissolution of the partnership
cannot be considered in isolation rather it has to be considered together
with the objections raised with respect to the veracity of the facts stated by
2
(2015) 9 SCC 287
3
2020 (1) ALD 260 (SC)
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respondent No.1 in the plaint which go to the very root of the case, i.e.,
maintainability of the suit itself.
Contentions of respondent No.1:
15. The learned counsel for respondent No.1 adhered to the version
presented before the trial Court i.e. the suit is filed seeking dissolution of
appellant No.1-partnership firm and there is an admission on the part of the
appellants in the reply notice dated 19.03.2022 and the written statement
filed by them with respect to the dissolution of partnership firm and
therefore, a petition was filed for passing of preliminary decree under
Order XII Rule 6 of CPC. It is submitted that the trial Court considered the
admission made by the appellants in the written statement and has rightly
passed the preliminary decree. Therefore, it is the case of respondent No.1
that the appeal lacks merits and is liable to be dismissed.
Findings of the Court:
16. When the version presented by both the rival parties considered, it is
seen that respondent No.1 filed suit for dissolution of partnership firm and
for rendition of accounts of appellant No.1-firm. In the said plaint, there are
several claims made against the appellants about misappropriation and
mismanagement of the partnership business. There is a reference to several
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immovable properties and collection of rents from several entities
warranting rendition of accounts. Respondent No.1 claimed that the
partnership came into existence on 01.04.1992 and he was inducted on
01.04.1997. Appellants Nos.2 to 4 and respondent No.2 were collecting
rents from various entities and used for household maintenance. Reference
is made to several properties involving the role of the appellants and the
respondents. In the year 2015, respondent No.1 questioned the appellants
with respect to maintenance of accounts and the properties and
investments. When the differences could not be resolved, respondent No.1
felt need for dissolution of the partnership firm and got legal notice issued
on 23.08.2015. The said legal notice was received by the appellants on
26.08.2015. Despite receiving the legal notice, the appellants did not take
any steps and continued with their activities. In spite of giving sufficient
time, the appellants did not wind up the affairs of the firms and settle the
accounts with respondent No.1. Therefore, respondent No.1 got a caution
notice issued in Times of India on 22.05.2018, apart from Hindi Millat
newspaper, and thereafter, filed the suit for dissolution of partnership and
for rendition of accounts of said partnership i.e., appellant No.1.
17. This entire sequence of facts, as narrated by respondent No.1 in the
plaint are disputed. The mismanagement of the partnership firm, the
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ownership of the immovable properties and entitlement of respondent No.1
for 1/5th share in said immovable properties is denied by the appellants.
Further, at paragraph No.13 of the written statement, the appellants have
conceded that appellant No.1 firm was closed with effect from 30.09.2015.
The said paragraph is extracted and produced below:
“13. It is submitted that Defendant No.1 firm was already dissolved by
the plaintiff by issuing a notice and accordingly business of the
dissolved 1st Defendant Firm were closed with effect from 30-9-2015
and said fact was also informed to the Commercial Tax Officer,
Special Commodities Circle, Hyderabad on 6-12-2016.”
18. Besides, the appellants’ disputed mismanagement of the business and
misappropriation of income or forging the signature of respondent No.1.
Further, along with the pleading about the dissolution of partnership in
view of legal notice dated 23.08.2015, the appellants had also pleaded that
the plaint averments are misconceived and baseless. Relevant paragraph
No.19 of the written statement is extracted and produced below\
“19. The contention of the plaintiff in para 16 of the plaint are totally
misconcerned and baseless to his knowledge. As already submitted
above, the defendant No.1 was dissolved in view of the notice dt:
23.08.2015 by the plaintiff as the partnership was at will and the said
dissolution of defendant No.1 was also informed to the Taxation
Department as mentioned above.”
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19. There is also denial of the contention of respondent No.1 that the
partnership is continuing with its activities and therefore, there is a need for
dissolution of partnership. The appellants denied the immovable properties
mentioned in the plaint being assets of the partnership. Relevant paragraph
No.22 is extracted and produced below:
“22. That the contention of plaintiff in para 18 and 19 of the plaint are
baseless and false and hence defendant 2 to 5 specifically deny that
dissolution of defendant No.1 firm requires to be done through the
process of this Hon’ble Court and that immovable properties are all
treated as share under partnership Act and that all the alleged assets
both movable and immovable are accountable are not correct and
hence the defendant 2 to 5 specifically deny the same.”
20. To sum up, the appellants at paragraph Nos.27 and 28 have pleaded
that the suit itself is not maintainable as the same is based on false
averments. Relevant paragraphs are extracted and produced below:
“27. That the suit and suit claim are based on falsehood and without
any basis and hence the suit is not maintainable.
28. That the suit is not properly valued. According to the plaintiff his
share is more than what he valued the suit. That the suit is barred by
the limitation as the suit cannot be filed for unlimited periods. The
accounts of the firm has already been the subjected of assessment
before the Taxing Authorities and hence the relief claimed is also not
maintainable. It is not out of place to mention that the accounts
submitted before the Taxing Authorities have not been challenged and
hence the plaintiff is stopped from making false allegations and he is
bound by the assessment of income as assessed which become final.”12
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21. When the above-mentioned contents of paragraph Nos.19, 22, 27 and
28 are perused it is seen that the appellants did not make any kind of
admission in isolation, rather the averment with respect to closing of the
partnership is tied up with many other averments about the truthfulness of
the plaint averments made by respondent No.1. According to the
appellants, the suit itself is not maintainable. Without considering the
maintainability of the suit, passing of preliminary decree by an isolated
reading of paragraph No.13 of the written statement, is erroneous and
therefore liable to be set aside.
22. The dilemma of the trial Court is also evident from the fact that, in
spite of passing the impugned order, while framing issues, there is issue
No.1 with respect to the entitlement of respondent No.1 for dissolution of
appellate No.1-partnership firm. In case the trial Court was fully convinced
that there is no need to consider the issue of dissolution of partnership as
held in the impugned order, there was no need for framing issue No.1.
23. In view of these contradictions and in view of the discussion of the
averments of the written statement, this Court is of the considered opinion
that the written statement averments were not perused in correct
perspective and therefore, the trial Court arrived at an erroneous conclusion
and said finding needs to be set aside.
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24. In the result, the City Civil Court Appeal is allowed by setting aside
the impugned order and decree dated 11.03.2024 passed by the learned trial
Court in I.A.No.393 of 2022 in O.S.No.479 of 2018 and consequently, the
I.A.No.393 of 2022 is dismissed. There shall be no order as to costs.
Miscellaneous applications, if any, pending shall stand closed.
__________________
RENUKA YARA, J
Date: 06.04.2026
GVR
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