Delhi HC relegates aggrieved partner of LLP to file commercial suit under Commercial Courts Act; Says if any Court inherently lacks jurisdiction, then jurisdiction can’t be vested on that Court by agreement of parties

Read Order: Aanchal Mittal & Ors. vs. Ankur Shukla 

Pankaj Bajpai

New Delhi, March 7, 2022: Taking into account the nature of the disputes raised in the plaint being inter-se disputes of partners, and the fact that business of the LLP was being carried out in Delhi, the Delhi High Court has held that option of an LLP or any other business entity to carry out business in different parts of the country, does not mean that a suit, with regard to disputes between the partners, could be filed in any place where the business of the firm/LLP is carried out.

The Single Judge Amit Bansal therefore finding that the books of accounts of the LLP are kept at its registered office in Hyderabad, observed that the jurisdiction to entertain the present suit shall vest with the Courts in Hyderabad. 

Going by the background of the case, a plaint was filed by Ankur Shukla (Respondent – Plaintiff), being one of the partners of Baby Staples LLP (third petitioner), which is a Limited Liability Partnership (LLP), against the respondents, who are the remaining partners of the said LLP. The Commercial Court after noting the submissions of the parties, observed that since the averments made in the plaint regarding the defendant’s carrying on the business within the territorial jurisdiction of this Court has not been denied as per provision of Civil Procedure Code or as per Commercial Courts Act, the averments in the plaint regarding the jurisdiction of this court has to be deemed to be admitted. 

Since as per averments in the plaint in the absence of specific denial of the same, the defendants are carrying on business in Delhi and within the territorial jurisdiction of this Court, therefore, granting of exclusive jurisdiction under the LLP agreement is a legally valid and enforceable agreement and is not a void agreement u/s 28 of the Indian Contract Act as is being claimed by the petitioner, concluded the Commercial Court. Hence, present petition. 

After considering the submissions, Justice Bansal found that the prayers made in the plaint only seek directions for the respondent to be provided access at all times to the business accounts in his possession and it has nowhere been pleaded in the plaint that the business accounts, in respect of which access is sought by the respondent, are kept in Delhi. 

In fact, the plaint is conspicuously silent with regard to the cause of action for filing of the suit and only averment in suit with regard to the territorial jurisdiction are contained in the plaint, added the Single Judge. 

Justice Bansal further found that no details have been pleaded in the plaint with regard to the cause of action that arose in favour of the respondent to file the present suit in Delhi.

The entire basis of the respondent for filing the suit in Delhi is on account of the fact that the LLP carried out business in Delhi and that the products of the LLP are regularly sold in Delhi by means of online sales as well as through physical stores such as Nature’s Soul, which is in Delhi, noted the Single Judge. 

The High Court therefore concluded that there is no principal or subordinate office of the LLP in the State of Delhi and neither are the books of accounts kept in Delhi, hence, there is no cause of action in respect of the present suit, which is arising within the territorial limits of the Courts in Delhi.

Unlike Section 430 of the Companies Act, 2013, there is no bar on the jurisdiction of the Civil Courts under the provisions of the LLP Act, and therefore, in terms of Section 9 of the CPC, the suit shall be maintainable in a Civil Court, added the Court.