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1967 DIGILAW 138 (GUJ)

HARIVALLABH CHHOTALAL NAGORI v. AHMEDALI RAJABHAI KADIANI

1967-11-30

N.G.SHELAT

body1967
N. G. SHELAT, J. ( 1 ) THE contention made out by Mr. Hathi the learned advocate for the appellant is that the mortgage transaction was quite an independent one and whatever the amount was advanced thereunder was advanced to the defendant personally and not in the capacity of his being a partner of a partnership firm and that any such advance made under the mortgage deed had nothing to do with the partnership business He further urged that even if it was advanced for partnership purposes a suit such as the one for the amount advanced to the defendant under a mortgage deed can still lie as neither it is barred by any provision of law nor under any terms of contract either under the mortgage deed or the partnership deed between the parties. It will be open according to him to defendant to file a suit for dissolution of partnership and rendition of general accounts and the decree passed in this suit can well be accounted for therein. Now both the Courts have found that the amount though advanced to the defendant personally under a mortgage deed it was advanced for partnership business and for that the defendant had made himself liable for the same. That finding of fact cannot be challenged before this Court in second appeal. It has therefore to be seen as to whether with that finding it is open to him to file a suit for recovering the amount under the mortgage deed. ( 2 ) NOW one fact is clear that having regard to the terms of the mortgage deed Ex. 8 as also the terms of the partnership deed Ex: 5 entered Into between the parties no bar is created against the plaintiff filing such a suit for recovering any amount advanced to the defendant either in his personal capacity or even as a partner of the firm. Besides the mortgage deed does not in any way recite any condition to have the claim thereunder only adjusted in the settlement of accounts of the partnership. Another fact to be kept in mind is that besides the defendant and the plaintiff there was one another person Daudbhai as a partner in the firm. Besides the mortgage deed does not in any way recite any condition to have the claim thereunder only adjusted in the settlement of accounts of the partnership. Another fact to be kept in mind is that besides the defendant and the plaintiff there was one another person Daudbhai as a partner in the firm. He is not a party either to the mortgage deed or a party to the suit The transaction of mortgage was an independent one inasmuch as it created liability for the amount taken by him in his different capacity and not as a partner of the firm and again for the benefit of the firm In that the other partner Daudbhai had nothing to do and he would not be liable for the same. At the same time apart from authority. it is clear that there Is no provision in the Partnership Act which totally forbids any such suit against one of the partners under a different transaction even though It has some relation to the partnership business in which event that amount may have to be taken into account while taking general accounts. In such circumstances it is difficult to say that this suit was not maintainable. In this connection I may well refer to material observations from Lindley on Law of Partnership 11th Edition at page 668. Those observations run thus : Again if one partner gave to his co-partner a bill or note which was in such a form as to bind not the firm but the partner who gave it he might be sued by his co-partner thereon what-ever the state of the account between the two might be and although the bill or note in question had reference to some partnership transaction; for by giving the bill or note the demand in respect of which it was given was isolated from the general partnership accounts. ( 3 ) MR. Hathi has referred to some decisions in support of such a proposition and I would refer to them In the case of Govula Ramkistiah p. Yerram Yellappa A. I. R. 1959 Andhra Pradesh 653 it was held that:in cases involving special circumstances one partner can sue another during the subsistance of the partnership without asking its accounts or dissolution. Thus if a suit is brought by one partner against another for the recovery of a certain amount. Thus if a suit is brought by one partner against another for the recovery of a certain amount. the relief sought should be given to him though it may arise out of partnership business or connected with it and does not involve taking of general accounts. The next case referred to was of Hari Shanker Misra v. Firm Bansilal Abirchand A. I. R. 1946 Nagpur 266. It was a suit for recovery of a loan advanced by the plaintiff to the partnership and the plea raised in defense was that without asking for general accounts the suit for an isolated item was not maintainable. It was held that though ordinarily disputes between partners inter se are decided in a suit for dissolution of partnership and for accounts there is nothing in law in special circumstances to prevent a partner acting in different capacity to sue some of his partners for such relief and he is entitled to as flowing from that different capacity unconnected with his capacity as a partner. Another came of K Venkata Reddi v. K Narasayya I. L. R. 32 Madras 76 was referred to. It was a suit for recovery of an amount on a cheque and the defense contended that the suit was not maintainable as a suit for general accounts has to be filed whereby such amount has something to do with the partnership business. That contention was negatived and it was held that in regard to suits by one partner against another for a partial account the general rule as applied in India is that if the account is sought in respect of a matter which arising out of partnership business or connected with it does not involve the taking of general accounts the Court will as a rule give the relief applied for. It will be for the Court to determine under what circumstances it will be equitable to order 8 partial account having regard to the rights of the parties under the contract There is no rule of law now in force that a partial account cannot be ordered under exceptional circumstances. ( 4 ) IT appears therefore clear that there is no rule of law which precludes any such action being brought by any party to the partnership for recovering any amount from any partner even though it may have some connection with the partnership concern itself. ( 4 ) IT appears therefore clear that there is no rule of law which precludes any such action being brought by any party to the partnership for recovering any amount from any partner even though it may have some connection with the partnership concern itself. The present case stands far on a better footing. The claim is based on a mortgage deed passed by the defendant alone and whereby he has made himself liable for the amount borrowed thereunder. In that deed no reference has been made that it has to be accounted for in the partnership. One other partner is neither a party to the deed nor in the suit. Even though It has connection with the partnership business and may have to be taken Into if partnership is dissolved and general accounts taken it is not that It cannot be separated therefrom and no prejudice is likely to be caused to the defendant if a decree for such an advance made to the defendant is passed in this suit. General accounts need not necessarily be taken at this stage for such a purpose. It would be open to the defendant to file such a suit for general accounts if he so desired. But it can hardly lie in the mouth of the defendant to say that the plaintiff must sue for the dissolution of partnership and claim general accounts before he can claim any amount of this transaction with the plaintiff I therefore disagree with the Courts below in that respect and hold that the suit is maintainable In law and be decided on its merits. Appeal allowed. .