Supreme Court holds revisional order rendered infructuous after withdrawal; directs fresh consideration of impleaded partner's claim

A bench of Justices B.R. Gavai and Augustine George Masih heard the Special Leave Petition challenging the Punjab & Haryana High Court’s remand order in a dispute arising from a land acquisition award and competing claims to the enhanced compensation. The petition by Hydraulics and Pneumatics (India) LLP assailed the Revisional Court’s decision setting aside an executing court order that had rejected an application under Order XXI, Rule 15(2) CPC filed by Respondent No.1, who claimed partnership rights in the LLP and an entitlement to execution of the award.

The Court allowed the petition in part and disposed of the special leave petition as infructuous, observing that Respondent No.1 had withdrawn its application before the Executing Court after the revision was allowed, leaving no pending application on its behalf. The Court directed the Executing Court to consider an independent application filed by one of the original partners, Anirudh Kumar, “in accordance with law, after giving an opportunity to all the parties” and remitted the deposited amount back to the Executing Court for appropriate orders. The Court, in its reasoning, observed: “When there is no application on behalf of Respondent No.1 pending before the learned Executing Court, the order passed by the Executing Court in favour of Respondent No.1 is totally rendered infructuous.” The bench further clarified that “none of the observations made in the impugned judgment and order passed by the Revisional Court would be taken into consideration by the learned Executing Court while passing an order on the application under Order XXI Rule 15(2) of the CPC of the said Anirudh Kumar.”

Background The dispute arose from land owned by the petitioner-LLP that the State acquired under the Land Acquisition Act, 1894. Notifications under Sections 4 and 6 were issued in 2012 and an award passed on 29 May 2013. The petitioner, which had been a private limited company before conversion into an LLP, challenged the award in Land Acquisition Case No.4 of 2014; the Reference Court enhanced compensation and, after purported deductions, awarded Rs.56,000 per sq. yard with statutory benefits. The petitioner’s appeal was pending in the High Court when it filed an execution petition in the Executing Court.

Respondent No.1 relied on a supplementary agreement dated 17 December 2018 asserting that it had acquired an 11.33% interest from original partner Anirudh Kumar and sought relief under Order XXI, Rule 15(2) CPC. The Executing Court rejected that application, holding that an LLP was a separate juristic person and that shareholders (partners) had no independent rights over the company’s assets, noting that “the LLP was having a separate entity, it was a juristic person distinct from shareholders and that the shareholder did not have any independent rights over the company’s assets.” The Revisional Court allowed the revision, treated the award as a joint decree conferring rights on all partners, set aside the Executing Court’s order and remanded for fresh consideration.

On appeal to this Court, counsel for the petitioner argued that the supplementary agreement was bogus and unsigned and that governing precedents supported the Executing Court’s conclusion. Counsel for Respondent No.1 contended that the Revisional Court rightly remanded the matter and stressed that funds withdrawn by the State left Respondent No.1 without remedy; it was also pointed out that some amounts deposited in this Court’s registry had been paid to Anirudh Kumar. After this Court granted interim relief, Respondent No.1 withdrew its application before the Executing Court and Anirudh Kumar filed a fresh application under Order XXI, Rule 15(2). The Supreme Court found that withdrawal rendered the Revisional Court’s order ineffective vis-à-vis Respondent No.1 and accordingly disposed of the SLP as not surviving. The Court directed the Executing Court to consider Anirudh Kumar’s application afresh, remitted the registry deposit to the Executing Court for appropriate disposal, and ordered that pending impleadment applications stood disposed of. The Court cautioned that the Executing Court should not be guided by observations in the Revisional Court’s impugned order when deciding Anirudh Kumar’s application.

Case Details: Case No.: Special Leave Petition (C) No. 27417 of 2023 Case Title: Hydraulics and Pneumatics [India] LLP v. M/s. Metal Arc Agri. LLP and Others Appearances: For the Petitioner(s): Shri A.N.S. Nadkarni, Senior Counsel For the Respondent(s): Shri Nidhesh Gupta, Senior Counsel (appearing for Respondent No.1 and for Anirudh Kumar)