Research › Browse › Judgment

Calcutta High Court · body

1908 DIGILAW 73 (CAL)

Dwarka Das Karnani v. Chuni Lal Daga

1908-02-28

body1908
JUDGMENT 1. This appeal arises out of a suit for accounts of a partnership business carried on at Sukia in the Darjeeling District. The Plaintiff Chuni Lal claimed 8 annas share in the business, and sought for an account or in the alternative for a decree for dissolution of partnership and a share of the profits. The Defendants, Dwarka Das and Sheo Protap, who are father and son, denied that the Plaintiff was a partner with them and contended that if he were, he had only a 41/2 annas share and that his suit was barred by limitation. The admitted facts are that the Plaintiff, the Defendant Dwarka Das, and two other persons Johuri Lal and Girdhari Lal formerly carried on business together. Johuri and Girdhari retired on the 3rd November 1900. The Plaintiff and the two Defendants then started business together. On the 28th March 1901, the Defendants say, the Plaintiff voluntarily retired and they have carried on the business by themselves ever since. The Plaintiff, however, maintains that he never retired, and that he is entitled to an account and a share in the profits. The Judge has found (1) that the suit is not barred by limitation (2) that the Plaintiff did not voluntarily retire but that the Defendants illegally expelled him from the partnership on the 28th March 1901 (3) that the Plaintiff did not thereby cease to be a partner and (4) that the Plaintiff is entitled to a decree for dissolution of the partnership, and for an account and that the profits of the business are to be divided equally between the Plaintiff and the Defendants. 2. The Defendants appeal and on their behalf it has been urged (1) that on the Judge's finding that the Plaintiff was expelled from the partnership business on the 28th March 1901, the suit is barred by limitation (2) that the Plaintiff voluntarily retired from the business, or if he did not, he tacitly abandoned it and (3) that in any case the Plaintiff had only a 41/2 as. and not an 8 as. share in the new business. 3. The Appellants' pleader relies in support of his first plea on articles 106 of the Limitation Act which provides that a suit for an account and share of the profits of a dissolved partnership must be brought within 3 years of the date of the dissolution. and not an 8 as. share in the new business. 3. The Appellants' pleader relies in support of his first plea on articles 106 of the Limitation Act which provides that a suit for an account and share of the profits of a dissolved partnership must be brought within 3 years of the date of the dissolution. He contends that the Plaintiff "ceased to be a partner" within the meaning of cl. 7 of sec. 253 of the Indian Contract Act when he was expelled, that according to a note in Cunningham and Shepherd's Contract Act "any member may cease to be so either by death, or by retirement or by expulsion" and that according to Lindley on Partnership, "as soon as a partnership is dissolved, or there is any exclusion of one partner by the others, the statute of limitation begins to run" (7th Ed. p. 553). We think, however, that the expulsion referred to in the note in Cunningham and Shepherd's Contract Act, must mean the expulsion referred to in cl. 9 of sec. 253, that is expulsion by order of the Court and the "exclusion" referred to in Lindley on Partnership must mean an exclusion in accordance with an express provision in the deed of partnership giving the majority of the partners power to expel a partner. There is no provision in the Indian Contract Act giving partners power to expel a partner without an order of the Court and it is clear from several passages in Lindley on Partnership (7th Ed. pp. 431, 461, 624) that no such power exists in England unless provided for by express agreement. Hence, au irregular expulsion, as the Judge finds took place in this case, cannot put an end the partnership, so that there can be no limitation in such circumstances in a case like the present. 4. Even if according to Lindley limitation runs against au excluded partner from the date of his exclusion this is the result of the terms of the English statute of Limitation, which provides that an action such as this must be brought within 6 years of the date of the commencement of the action. The terms of Art. 106 of the Indian Limitation Act are different. They provide for a suit being brought within 3 years of the partnership. The terms of Art. 106 of the Indian Limitation Act are different. They provide for a suit being brought within 3 years of the partnership. If, as the Judge has found, there was no dissolution of partnership, the article does not apply at all. The article applicable would be Art. 120, which allows 6 years for the suit and this suit has been brought within 6 years from the date of the Plaintiff's irregular expulsion by the Defendants. 5. The Appellant's next plea is that the Plaintiff voluntarily retired or tacitly abandoned his share in the business. This is entirely against the weight of evidence. The evidence oral and documentary satisfies us that the Plaintiff though called on to retire by the Defendants stoutly refused to do so. A letter marked Ex. M. shows that he relenttd and invited the principal Defendants to call on him and settle matters. He says the Defendants never did so. The Defendant maintains that he did settle matters and points to an entry in his books showing a settlement of accounts on the 28th March 1901. This entry is not signed by the Plaintiff. No receipt or writing was taken from him, as was taken on the retirement of Johuri Lal and Girdhari Lal on the 3rd November 1900, i.e., a few months previously. And we accordingly agree with the Judge in the Court below that the Plaintiff neither voluntarily retired from, nor tacitly abandoned, his share in the business. The pleader for the Appellants does not press his third plea. On the contrary, he admits that he cannot successfully impugn the Judge's finding that the Plaintiff had a half share and the Defendants the other half share in the new business started on the retirement of Johuri and Girdhari Lal. We therefore confirm the decree of the Court below and dismiss the appeal with costs.