JUDGMENT : A. Misra, J. - This appeal has been preferred by the Plaintiff against the concurrent judgments of the Courts below. Admittedly Plaintiff and Defendant entered into a partnership on 26-12-1953 and a deed of partnership (Ex. 1) was executed and registered. Under the terms of Ex. 1, full ownership of the stock-in-trade which previously belonged to Defendant was transferred to the Plaintiff and it was agreed that the profits were to he shared in the ratio of 5/6th and 1/16th between him and Defendant respectively. Ex. 1 among other things contained a further stipulation enabling the Plaintiff to discontinue from the partnership business at any time no chose by giving 15 days notice to the Defendant. On 9-4-1958, Defendant served a notice on the Plaintiff conveying his intention to dissolve the partnership to which the latter replied questioning the right of the former to obtain such a dissolution. Subsequently, on 5 10-1959, Defendant made over a document purporting to be a deed of dissolution of partnership to the Plaintiff for his signature, but the latter did not comply. Defendant illegally took away the stock-in trade and forcibly prevented the Plaintiff from carrying on the business from 5-10-1959. Therefore, Plaintiff filed the suit for a declaration that the partnership still continues and for recovery of Rs. 4,410.19 as the value of the stock-in-trade. Defendant among other things resisted the suit mainly on the grounds. According to him, the partnership was one at will, and therefore, dissolution took place on his serving the notice dated 9-4-1958. Secondly, he pleaded that subsequent to the date of notice, there was an amicable settlement between the parties at the intervention of Shri A.T. Misra, Plaintiff's lawyer and the partnership was dissolved with mutual consent. The draft containing the terms of dissolution was prepared and approved by Shri Misra in the presence of both parties, subsequently engrossed on stamp paper on 5-10-1959 and was executed by the Defendant, but Plaintiff took it promising to execute the same after consulting his father. He, however, did not execute the document, though in accordance with the amicable settlement dissolution had taken place and parties acted according to the terms contained in the draft. 2. The trial Court dismissed the suit on the finding that the partnership created under Ex. 1 was a partnership at will which was dissolved by notice (Ex.
He, however, did not execute the document, though in accordance with the amicable settlement dissolution had taken place and parties acted according to the terms contained in the draft. 2. The trial Court dismissed the suit on the finding that the partnership created under Ex. 1 was a partnership at will which was dissolved by notice (Ex. E) dated 9-4-1958 served by Defendant on the Plaintiff as well as by subsequent amicable settlement, between the parties on 5-10-1959 on the terms contained in the document (Ex. G). Plaintiff preferred an appeal against the decision of the trial Court. The lower appellate Court held that the partnership created under Ex. 1 not being a partnership at will could not be dissolved by Ex. E. It, however, agreed with the finding of the trial Court that dissolution of the partnership took place with consent of partners by way of amicable settlement. 3. Learned Counsel for Appellant has assailed the judgment and decree of t he Courts below mainly on two grounds. Firstly, it is contended by him that when Ex. 1 provides a specific mode of dissolution, it will not be permissible to dissolve the partnership in any other manner even by consent or agreement. Secondly, it is contended that the Courts below have dearly erred in drawing a legal inference of dissolution on the facts said to have been proved. 4. The only point for decision in this second appeal is whether dissolution of partnership has taken place or not. Though in the Courts below Defendant raised the contention that the partnership evidenced by Ex. 1 was a partnership at will such a contention has not been pressed before me. The terms contained in para 9 of Ex. 1 clearly show that the partnership under Ex. I was not a partnership at will. This para contains a clear stipulation giving an option to the Plaintiff to terminate the partnership by giving 15 days' notice at any time he was unwilling to continue. Therefore, the lower appellate Court is right in holding that it was not a partnership at will, and as such, was not dissolved by Ex. E. 5. Coming to the first contention raised by Appellant, the point is whether a partnership can be dissolved with consent even where the parties have agreed to a specific mode of dissolution.
Therefore, the lower appellate Court is right in holding that it was not a partnership at will, and as such, was not dissolved by Ex. E. 5. Coming to the first contention raised by Appellant, the point is whether a partnership can be dissolved with consent even where the parties have agreed to a specific mode of dissolution. From a reading of Sections 40 to 44 of the Partnership Act, it is clear that a partnership can be dissolved only in one of the modes provided thereunder. The present partnership not being one at will, the only relevant section for consideration is Section 40. This section covers cases where all partners agree that the partnership should be dissolved as well as cases where dissolution occurs in pursuance of a contract previously made providing for the manner of dissolution. A reading of the section shows that there is no bar for having dissolution of the partnership where all the partners consent even in cases where the contract provides for a particular manner of dissolution. Therefore, if it is found in the present case that there was a subsequent settlement or agreement between the partners to dissolve the partnership and dissolution was effected with consent, such a dissolution was not be invalid in law simply because the partnership deed provided for a particular mode of dissolution. This contention of Appellant therefore has no merit. 6. The second contention of Appellant is that the Courts below have erred in their finding that dissolution of the partnership has taken place by amicable settlement between the parties. It is argued by learned Counsel for Respondent that the concurrent finding of the Courts below about dissolution of the partnership by amicable settlement being a finding of fact is not assailable in second appeal. It is not disputed that the question whether it firm has been dissolved or not is a mixed question of law and fact. The facts relied upon by the parties in support of their respective contentions as to whether and when a partnership was dissolved, no doubt, are questions of fact and the findings recorded on those questions are necessarily findings on questions of fact. At the same time, the conclusion or inference drawn from proved facts is a question of law.
The facts relied upon by the parties in support of their respective contentions as to whether and when a partnership was dissolved, no doubt, are questions of fact and the findings recorded on those questions are necessarily findings on questions of fact. At the same time, the conclusion or inference drawn from proved facts is a question of law. To state it in otherwords, the question whether the inference that dissolution or non-dissolution of a particular partnership drawn by the lower appellate Court from the facts found by it is or is not correct is a question of law-vide A. I.R. 1940 Bom. 2631 and Venkatlal Baldeoji Mahajan Vs. Kanhiyalal Jankidas and Others. Therefore, though the finding of the Courts below regarding certain facts may not be open to challenge in second appeal, the question whether from those facts it is legitimate to draw an inference of dissolution of a partnership, as has been done by the Courts below, can be examined. 7. As stated above, dissolution of a partnership by consent of partners is permissible. Such a dissolution by consent need not be in writing. It may take place by oral agreement and also may be inferred from the circumstance proved in each particular case and the conduct of the parties. In the ultimate analysis, therefore, the question whether dissolution has been brought about not will depend on the intention of the parties and this intention is to be gathered in the absence of any document from the facts and circumstance of a given case. 8. According to Plaintiff, there has been no dissolution, while according to Defendant, dissolution took place by amicable settlement arrived at with the help of Shri Misra, Plaintiff's lawyer. Defendant's further case is that parties agreed to reduce the terms of the amicable settlement to writing for which purpose a draft was prepared and scrutinised by Shri Misra, engrossed on stamp paper and executed by him, but Plaintiff ultimately did not put his signature and kept the incomplete document in his custody till its production in Court. Thus there is no completed document in the present case evidencing the alleged dissolution of the partnership. In such circumstance, the question whether the jural relationship was put an end to is to be inferred from certain facts and circumstance proved and the conduct of the parties. 9.
Thus there is no completed document in the present case evidencing the alleged dissolution of the partnership. In such circumstance, the question whether the jural relationship was put an end to is to be inferred from certain facts and circumstance proved and the conduct of the parties. 9. Learned Counsel for Appellant contends that the Courts below erred in drawing an inference of dissolution as there is no evidence that both parties agreed before Shri Misra to dissolve the firm, Defendant did not examine himself to support such an agreement and even accepting the evidence adduced on the side of Defendant, it amounts to only that both parties were present before Shri Misra when the draft (Ex. F) was prepared. It has further been argued that when Ex. G is Raid to contain the terms of the agreement, oral evidence about the contents will have to be excluded. This last contention would have had some force had it been the case of Defendant that dissolution was effected under 'Ex. G. Defendant's case is that dissolution WAS agreed to by way of An amicable settlement and Ex. F was prepared only to contain the terms which bad been agreed upon. The question here does not relate to the terms contained in Ex. G, but it relates to a fact whether with consent it was agreed to put an end to the jural relationship between the parties. Therefore, this has to be judged on a consideration of the proved facts, circumstance and conduct of the parties. 10. Evidence was adduced on the side of Defendant that misunderstandings between the parties arose since April, 1958, subsequently they approached Shri Misra, Plaintiff's lawyer for effecting dissolution by way of an amicable settlement and in his presence an agreement was arrived at by both parties to dissolve the firm. Shri Misra dictated the draft (Ex. F) in which he made some corrections and gave an endorsement to that effect marked Ex. F/1. So also, the D.ws. have deposed that the terms of x. F were engrossed on stamp paper by D.w. 3 in the presence of both parties in the office of the firm where Defendant put his signature and made over the document to the Plaintiff who promised to sign it after consulting his father, but subsequently did not return the same till its production in Court.
D.w. 1 also deposed that Plaintiff received some money in cash, besides some bill covers on 5-10-1959. Out of the original book value of the stock-in-trade at the time of entering into the partnership, Plaintiff was still liable to pay Rs. 12671- and this amount was' adjusted towards an amount of Rs. 1300/- payable to the Plaintiff at the time of dissolution. On the other hand, Plaintiff in his evidence completely denied these facts and asserted that since 10-4-195 he had been prevented from going to the firm premises and there was no amicable settlement subsequently between them. According to him, on 5-10-1959 Defendant went to his residence, made over Ex. G, but when be refused to sign, left the document with him. The lower appellate Court, on a consideration of the evidence, circumstance and conduct of the parties, preferred to rely on the testimony of the D.ws., and in substance, found that misunderstandings arose in April, 1 58, subsequently parties approached Shri Misra, Plaintiff's lawyer for amicable settlement which was arrived at and in the presence of both parties, Ex. F was prepared and corrected by the lawyer. It has categorically found that without instructions of the Plaintiff, who was in charge of the entire business, the details found in Ex. F relating to the business could not have been mentioned there. Similarly, it has found that Ex. G was engrossed in the office of the firm in the presence of both parties on 5-10-1959 and it was made over to Plaintiff for his signature. It also found that bill covers and some cash were made over to the Plaintiff in pursuance of the agreement. Plaintiff's claim to have paid the entire amount representing the book value at the time of constitution of the partnership has been disbelieved and it has been found that by 5-10-1959 he was still to pay some amount to the Defendant which is proved by Exs. 1 to 1/2 as well as Ex. B, the reply sent by Plaintiff to Ex. E. That the his covers were received by Plaintiff, as alleged by Defendant, finds support from the fact that subsequent to 5-10-1959 the former filed a number of suits against customers from whom amounts were due and obtained decrees impleading Defendant in each of them as a proforma Defendant.
B, the reply sent by Plaintiff to Ex. E. That the his covers were received by Plaintiff, as alleged by Defendant, finds support from the fact that subsequent to 5-10-1959 the former filed a number of suits against customers from whom amounts were due and obtained decrees impleading Defendant in each of them as a proforma Defendant. It is not Plaintiff's claim that these decrees were obtained on behalf of the partnership or amounts realised were treated as partnership funds. The Courts below, on a consideration of these facts and circumstance, have drawn the inference that on 5-10-1959 there was an amicable settlement resulting in dissolution of the partnership and that though the parties intended that the settlement should be evidenced by a regular deed of dissolution, it did not materialise as Plaintiff failed to execute it. In addition to the aforementioned facts, two other circumstance lend support to the Defendant's case of a dissolution having taken place by amicable settlement on 5-10-1959. The present suit was filed on 10-8-1960 nearabout a year thereafter. No attempt has been made to offer any explanation as to why Plaintiff waited for this long period to file the present suit for a declaration that the partnership still continues in spite of the fact that since 5-10-1959 the partnership business practically closed and Plaintiff was filing suits to recover the amounts due from the customers as the bill covers had been handed over to him. Secondly, it is admitted that on 5-10-1959 Ex. G containing signature of the Defendant was made over to the Plaintiff for his signature. It is immaterial whether it was made over at the firm's office, as has been found by the Courts below, or at the residence of Plaintiff, as stated by him. According to Plaintiff, Defendant came to him uninvited and left the document" though there was no talk of any amicable settlement before. This is highly improbable. Further, when since April, 1958 the relationship between the parties has been anything but cordial, each must have been mistrusting the other.
According to Plaintiff, Defendant came to him uninvited and left the document" though there was no talk of any amicable settlement before. This is highly improbable. Further, when since April, 1958 the relationship between the parties has been anything but cordial, each must have been mistrusting the other. Such being the background of their relationship, if Defendant came and left a document, as alleged by Plaintiff, it is reasonable to expect that suspicion would have arisen in his mind about the motive of Defendant and he would not have firstly retained any such document, secondly, even if it was left with him as stated, he would not have kept quiet for about a year without taking any steps of conveying his protest or returning it or going to a Court. The reasonable inference, therefore, is that before 5-10-1959 something had taken place and therefore, Plaintiff received the document (Ex. g) without any protest or objection, though subsequently for reasons of his own he did not sign and execute it. This being so, it is consistent with Defendant's version and the conduct of the parties that there was an amicable settlement, as stated. Ex. F was prepared in the presence of parties by Shri Misra which was subsequently engrossed in Ex. G. The date of handing over of Ex. G synchronises with the date from which the business of the firm is said to have been discontinued. This is also a factor which supports the inference that because a dissolution by amicable arrangement bad taken place, the business was discontinued and Ex. G was handed over to Plaintiff for execution. 11. Thus, from the facts and circumstance proved and the conduct of the parties, the inference drawn by the Courts below that there was a dissolution of the firm by amicable settlement on 5-10-1959 is legitimate and justified. Having agreed with this finding of the Courts below, I find no merit in the appeal. 12. In the result, the appeal fails and is dismissed with costs. Final Result : Dismissed