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1956 DIGILAW 109 (KER)

Idicula John v. Idicula Pappy

1956-09-17

SANKARAN, VARADARAJA IYENGAR

body1956
Judgment :- 1. This appeal is by the 1st defendant against the preliminary decree in O.S. No. 14 of 1121 on the file of the District Court of Mavelikara. 2. The suit was filed by the 1st respondent plaintiff for dissolution of partnership and for settlement of accounts. The partnership business consisted in the conduct of two chitty schemes registered as No. 118 of 1102 and No. 26 of 1104. There were four partners viz., the plaintiff, defendants 8 and 9 and John Idicula deceased, who was the father of defendants 1 to 6 and husband of the 7th defendant. Under the terms of the partnership agreement Ext. C, drawn between the parties at the time of the starting of the first of these chitties John Idicula was entrusted with the active management of the scheme and was on such account, granted 2/5 share while the other three partners were held entitled each to only 1/5 of the profits. According to the plaintiff the second chitty scheme No. 26 was also started and carried on the same understanding. The plaint averred that the chitty No. 118 terminated on 15.8.1115 one year after the due date by virtue of two extensions under certain special resolutions and that chitty No. 26 terminated in the usual course on 10.7.1116 and that with the death of John Idicula in Vrischigom 1120 his legal representatives the defendants 1 to 7 took up the further conduct of the winding up of the concerns, with the consent of the rest of the partners and as per the terms of Ext. C. They were however not properly attending to the collection or disbursements of the chitty moneys or to the due accounting thereof to the plaintiff and other partners. The suit was accordingly laid on 15.2.1121 for dissolution and accounting as stated above. The defendants 10 to 15 were impleaded as subsequent encumbrances of the property scheduled. 3. The suit was contested by defendants 1 to 7 mainly on the footing that the chitties in question terminated earlier than alleged in the plaint and that even on the plaint averments as to the termination the prayer for accounting made more than 3 years thereafter was barred by limitation. They denied having taken up management of the chitty after John Idicula's death and the accrual of any personal liability in consequence. They denied having taken up management of the chitty after John Idicula's death and the accrual of any personal liability in consequence. They pleaded further that the rights and liabilities of the partners as regards the second chitty scheme No. 26 was not governed by the terms contained in Ext. C. 4. The court below by its preliminary decree found that the chitty schemes No. 118 and 26 terminated respectively on 15.8.1111 and 10.7.1116, that the suit was nevertheless not barred because the relationship of partners continued as between the parties until all assets were realised and the liabilities paid off and that was not yet over at date of suit. The court also found that the 1st defendant had undertaken the conduct of the chitty subsequent to his father's death and could not therefore escape personal liability, whatever may be said of the other defendants. On the question of the shares of the partners, the court refused to apply Ext. C terms to chitty No. 26 and found that the partners had equal right among themselves so far as that scheme was concerned i.e., 1/4 share each. Hence this appeal by the 1st defendant. 5. The first question raised by learned Counsel for the appellant was about the date of termination of the second chitty scheme viz., No. 26 of 1104. The argument was that the court below should not have found that it terminated on 10.7.1116 merely on the ground that the 1st defendant's deposition on the matter as D.W.1 was inconsistent with the averment in the defendant's written statement. The 1st defendant's deposition to the effect that it terminated on 15.2.1110, really stood supported by Ext. VI special resolution in connection therewith. This argument is entitled to weight and we therefore accept it. We find accordingly that the second chitty scheme terminated on 15.2.1110 even earlier than the first and not on 10.7.1116 as found by the court below. But this variation in date is not after all of much consequence from the point of view of limitation as supposed, as will be seen presently. 6. The next and important question is as regards the period of limitation applicable to the suit. But this variation in date is not after all of much consequence from the point of view of limitation as supposed, as will be seen presently. 6. The next and important question is as regards the period of limitation applicable to the suit. Learned Counsel contended that the suit was governed by Art.93 of the Travancore Limitation Act corresponding to Art.106 of the Indian Act and should be held to be barred as having been filed more than 3 years after the termination of the chitties. But this argument is clearly unacceptable in view firstly, to the scope of the partnership business here as comprising not alone the conduct of the chitty till termination but the collection of amounts from prized subscribers and the discharge of liabilities as regards unprized subscribers and secondly, the nature of the suit, as one for dissolution and accounting and not for account in an already dissolved firm. In this view the dates of termination of the chittes become totally unimportant and you have to apply the six years' rule under the residuary Art.109 of the Travancore Act corresponding to Art.120 of the Indian Act. Reference may in this connection be made to Kuruvilla Thomas v. Kuruvilla Ittan and others, ILR (1955) T-C. 317, which held that "a partnership of two or more foremen formed for conducting a chitty would not be dissolved by the mere termination of the chitty, on account of the expiry of the period fixed in the variola for its duration. Under S.42(2) of the Partnership Act, it would be dissolved only on the completion of the business of the chitty, i.e., only with the completion of the discharge of its liabilities to the subscribers." and that therefore a suit for an account and a share of a dissolved partnership in the conduct of a chitty business; brought within 3 years of the complete discharge of the chitty liabilities, was not barred. Reference may also be made to Haramohan Poddar v. Sudarson Poddar, 25 CWN 847 corresponding to AIR 1921 Calcutta 538, which held that "Art. 106 applies only to a dissolved partnership as limitation cannot apply as between partners so long as the partnership continues." See also in this connection A. Khorasany v. C. Acha, AIR (1928) Rangoon 160; and Srinivasalu v. Ramakrishna, AIR (1933) Madras 353 (2). It is the common case of the parties that there has not yet been a dissolution of the partnership. The article of the Limitation Act applicable is therefore the residuary Article and the suit filed within six years of the accrual of the right to demand dissolution through court, is therefore not barred. 7. Learned Counsel next canvassed the question of the 1st defendant's personal liability as found by the court below. But there was positive evidence that after the death of John Idicula, the 1st defendant had consistently with Ext. C terms agreed with the rest of the foremen to carry on, from where his father left, and also actively functioned in the matter. And after all the 1st defendant is fixed with liability by the court below only to the extent of his actual collection. We therefore overrule this contention. 8. The last question raised on behalf of the appellant was about the shares of the foremen as regards chitty No. 26. Ext. C agreement was drawn up, no doubt, with reference to the mutual rights and liabilities as regards chitty scheme 118 alone. But there is no reason to consider that any different conditions were fixed as between the joint foremen in connection with the next chitty scheme 26. Both were conducted practically simultaneously and with funds mixed up. The extra share allowed to the active partner must in our opinion be taken to be a common feature of both the schemes. Indeed to hold otherwise would be to grant to the plaintiff more than he has prayed for in the plaint. In this view the share of John Idicula in chitty No. 26 also should be taken to be 2/5, the shares of the other partners being 1/5 each. We find accordingly and direct that the decree to be prepared in this court will incorporate this modification. 9. In the result the appeal will stand dismissed except for the modification indicated above. The parties will bear their respective costs in this Court.