Dharanidhar Das Gupta v. Muraridhar Das Gupta — 1981 DIGILAW 303 (CAL)

JUDGMENT B.N. Maitra, J. 1. THE plaintiff has alleged that in 1952, by a registered deed of conveyance, the plaintiff and his younger brother, defendant, acquired the good will and assets of the soap manufacturing concern run under the name and style of New Bombay Soap Factory. Before that, they used to carry on soap making business under the name and style of Midga Soap Company With the purchased assets and the assets of Midga Soap Co., the parties entered into a partnership firm, which was registered on the 20th February, 1953. In 1960, they started a brick business in partnership under the name and style of Das Gupta Brothers at uttarmouri Howrah. He took charge of the brick business and the defendant of the soap business. In 1967, the brick business came to an end because the landlord took possession of the bride field in execution of a decree for eviction. THEn he intended to take part In the management of soap business. But his brother adopted a hostile attitude. After September, 1960, no accounts were rendered by the defendant regarding the soap business. He could not have any access to the books of accounts THE defendant has been illegally dealing with the materials obtained on the basis of the permits issued by the Government. Hence the suit for accounts on dissolution of such soap business. 2. THE defendant has filed a written statement. It has been alleged, inter alia, that the plaintiff kept him in the dark about the affairs of the brick business. THE plaintiff earned huge profits from that business and appropriated the same. No accounts have been rendered. Income tax returns had been submitted till 1970-1971. He also made a counterclaim and asked for accounts of monies transferred to the brick business from the soap business on its dissolution. The learned Munsif stated that the defendant admitted that he was liable to render accounts to the plaintiff regarding the soap business. The parties did not fill the same character in the transaction relating to the brick business. There are two distinct partnerships and hence, the prayer for counter claim was not maintainable. He decreed the suit in a preliminary form and declared that the firm regarding the soap business stood dissolved from the date of the decree dated the 28th March, 1977. Necessary directions to render accounts were given. The defendant preferred an appeal. There are two distinct partnerships and hence, the prayer for counter claim was not maintainable. He decreed the suit in a preliminary form and declared that the firm regarding the soap business stood dissolved from the date of the decree dated the 28th March, 1977. Necessary directions to render accounts were given. The defendant preferred an appeal. The plaintiff also filed a cross-objection. The learned appellate court stated that the defendant's counter claim regarding the brick business arose out of the transactions between the parties and such counter-claim was entertainable in law. The learned Munsif's finding on this was set inside. Article 113 of the Limitation Act applied. The brick business was closed in 1967 and hence, the prayer for counter-claim made by filing a written statement on the 5th June, 1973, was barred by time. The appeal was dismissed. 3. NO decision was arrived at re gardening the cross-objection. Then an application for review was filed by the plaintiff. The learned Additional District Judge stated that the cross-objection had not been brought to his notice and hence, it could not be disposed of He stated that there was no merit in the cross-objection. The application for review was rejected. Hence this appea1 by the defendant. The plaintiff reason dent has filed a cross-objection. A revisional application has also been filed by him against the dismissal of the application for review. 4. IT has been contended on be half of the appellant that the learned Additional District Judge fell into an error in stating that Article 113 of the Limitation Act would apply to the prayer for counter-claim. Article 5 of the Limitation Act, which corresponds to Article 106 of the old Limitation Act of 1908, will apply. Reference has been made to the bench decision of Haramo han vs. Sudarshan in 25 C.W.N. 847 to support this contention. No notice contemplated by the provision of section 43 of the Partnership Act of 1932 was given. There was no communication of the fact of dissolution to the partner of the brick business. The written statement was filed by the defendant on the 5th June, 1973, and that was the date of communication to the plaintiff of the defendant's intention to dissolve the brick business. There was no communication of the fact of dissolution to the partner of the brick business. The written statement was filed by the defendant on the 5th June, 1973, and that was the date of communication to the plaintiff of the defendant's intention to dissolve the brick business. Reference has been made to Pollock and Mulla's Partner ship Act, 4th Edition, page 378, to show that in cases of a partnership at will the mere filing of a suit for dissolution does not amount to a notice of dissolution. The case of Benarashi Das vs Kanshi Ram in A.I.R. 1963 S.C. 1165 by also been referred to. IT has been contended that in March, 1977 he only asked for adding a prayer for dissolution of the partnership in brief business. That prayer was allowed and hence, 1he additional written statement, i. e., the amendment of the additional written statement with relate back to the date of filing of the original written statement on the 5th June, 1973, and the counter-claim will not be barred by time. Reference has been made to Lindley on Partnership, 13th Edition, page 557, to show that in case of a partnership at will, if a member brings an action for dissolution with out any previous notice, the writ is treated as notice to dissolve, and the dissolution will be the date of its service. Here the summons 7,was served on the defendant on the 30th January, 1973. It has been stated on behalf of the plaintiff-respondent that the brick business is an independent one and it has no connection with the parties' soap business. The transaction is entirely different and hence, the prayer for counter-claim is not maintainable. More over, there was abandonment of the brick business in 1967. Both the plaintiff and the defendant have stated that the brick business came to a close in 1967 or so. There was an eviction by the landlord from the kiln of the brick business? and that will be the date when the partnership of the brick business was abandoned and thereby dissolved. Sines that eviction was made in 1967 and the defendant filed a written statement asking for counter-claim in June, 1973, his prayer is barred by limitation. 5. PRIVY. There was an eviction by the landlord from the kiln of the brick business? and that will be the date when the partnership of the brick business was abandoned and thereby dissolved. Sines that eviction was made in 1967 and the defendant filed a written statement asking for counter-claim in June, 1973, his prayer is barred by limitation. 5. PRIVY. Council decision of Moug The v. Mah Thein My ah in L.R. 27 Indian Appeals 189 has been cited to show that however precarious the subject matter of a partnership may be, it is a matter of inference to be drawn from the facts of case if a partner has either able andoned or lost his interest therein by laches. Reference has also been made to the aforesaid case of Haramohan vs Sudarshan (Supra) to show that neither stoppage of business nor refusal of a partner to make further advance in the partnership can be treated as dissolution on of the firm. The question whether there has been an abandonment of a partner is a matter of inference to be drawn from the facts of each case, vide the page 850 of the report. The case of Sudarsanam vs. Narasimhulu in I.L.R, 25 Mad. 149- at pages 164 and 165 has also been cited. The bench case of Moni Bhusan vs. Amulya Chandra in 4 C.W.N. 522 at page 524 has been refers end to show that a partnership at will comes to an end with the institution of a suit for dissolution and for accounts. 6. IT has been further contended on his behalf that when the appeal was dismissed, the cross-objection was not considered. The subsequent application for review was illegally rejected. The revisional application filed to set aside that order should be allowed. The first question arises whether the counter-claim is legally maintainable. There is a finding of fact by the final court of fact that there are transactions between the parties and hence, the counter claim was maintain able. 7. REFERENCE may be made to the case of Mohindar Singh vs. Data Ram in A.I.R. 1972 S.C. 1048 at page 1052 to show that in that case the defendant filed a written statement, which was treated as a plaint in a cross suit. Then an additional written statement was filed. 7. REFERENCE may be made to the case of Mohindar Singh vs. Data Ram in A.I.R. 1972 S.C. 1048 at page 1052 to show that in that case the defendant filed a written statement, which was treated as a plaint in a cross suit. Then an additional written statement was filed. It has been stated that the addition- al written statement was rightly treated as a cross-claim by the courts below and it arose out of the "transactions" between the plaintiff and the defendant. That was a suit for recovery of certain amount on the basis of a khata. The defendant by his additional written statement put forward a counter-claim for accounts arising out of the transactions between them on the basis of an agreement. 8. SUB-rule (i) of amended rule 6A of Order 8 of the Code indicates that the defendant may in a suit set up a counterclaim regarding any right or claim in respect of a cause of action accruing to him against the plaintiff either before or after the filing of the plaint, but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not. In view of sub-section (3) of section 97 of the Amending Act of 1976, it applies to a pending proceeding. Both the claims are for money and hence, it must be held that the counter-claim is maintainable in law. The next point is to consider the effect of the aforesaid Privy Council decision of Moung Tha vs. Mah The in (Supra). That decision was delivered as far back as 1900, perhaps on the basis of the provisions of section 253 of the Contract Act. The section 253, which appeared in Chapter VII of Indian Contract Act, was repealed by Indian Sale of Goods Act, 1930. But there are no corresponding sections in the Indian Sale of Goods Act, 1930. There is another distinguishing feature. The previous cases and also the later bench case of Mani Bhushan vs. Annul Chandra (Supra) may have been decided on the basis of the provision of sections 252, 253 and 254 of the Indian Contract Act, which was repealed in 1930. This last bench case shows that there was a partnership at will. There is another distinguishing feature. The previous cases and also the later bench case of Mani Bhushan vs. Annul Chandra (Supra) may have been decided on the basis of the provision of sections 252, 253 and 254 of the Indian Contract Act, which was repealed in 1930. This last bench case shows that there was a partnership at will. The plaintiff was at any time entitled to put an end to the same, and he could do so intimating the desire to the other party and file a suit against his partner to give such intimation. But now in the face of the provisions of the statute, i.e. of section 43 of the Partnership Act of 1932, such previous view of dissolution on account of abandonment of partnership business, cannot be accepted. Section 3 of the Partnership Act says that the un repealed provisions of the Indian Contract Act, 1872, save in so far as they are inconsistent with the express provisions of the Act, shall continue to apply to firms. 9. LET it be seen whether the filing of the plaint will be the date on which the partnership will be deemed to be dissolved. In the case of Banarsi Das vs. Kanshi Ram in 1964 (1) S.C .R 316 at pages 328 and 329, it has been stated that sub-section (i) of section 42 of the Partnership Act does not say what will be the date from which the partnership will be deemed to be dissolved. Sub-section (2) says that the firm is dissolved from the date mentioned in the notice or if no date is mentioned, from the date of the communication of the notice. The date of service of a summons accompanied by the copy of the plaint in the suit for dissolution of partnership cannot be regarded as the date of dissolution of partnership and section 43 is of no assistance. The aforesaid bench case of Mani Bhusan Amulya Chandra (supra) has been in pliedly overruled by the Supreme Court decision. It has been further stated in that case that a partner can call for dissolution of the firm by giving a not we under section 43 (1), that is, with out the intervention of the court, and the partnership will be deemed to be dissolved when the summons along with the copy of the plaint is served on the defendant. 10. 10. NOW it has to be seen whether the brick business was dissolved. It may be stated at the outset that closure of a business is different from its dissolution. Both the plaintiff, P.W. 1 Murali Dhar, and defendant, D.W. 1, Dharani Dhar, have stated that the brick business was closed. But P.W. 1, Murali Dhar, has stated in his cross-examination that the brick business was not dissolved and the business was only closed following the eviction by the landlord. The question is whether Article 5 of the Limitation Act, as state end for the appellant, or the residuary Article 113, which corresponds to the old Article 120 of the Indian Limitation Act of 1908, will be applicable. It will appear from the bench case of Gokul Krishna vs. Sashimukhi in 16 at page 301 that where the partnership has not been dissolved before the suit, Article 106 of the Limitation Act would have no application, and so long as the partnership continues, the statute of limitation does not apply between the parties and consequently, Article 120 would apply. The same view was taken in the case of Haramohan vs. Sudarshan (Supra). The aforesaid Supreme Court case of Mohinder Singh vs. Data Ram (Supra) at page 1053 shows that in that suit the additional written statement was treated as a cross-claim, and hence, Article 120 of the Limitation Act of 1908 applied because the cross claim for accounts was not covered by any other Article of the Limitation Act. Article 5 of the Limitation Act lays down a period of three years from the date of dissolution where a suit is filed for accounts and share of the profits of a dissolved partnership. Article 113 of the limitation Act provides for a period of only three years from the date when th right to sue accrues. It is, therefore held that the case is governed by the provisions of the residuary Article It of the Limitation Act of 1963, and no of Article 5. The reason is simple be cause there is a mere reference to the brick business in the plaint. The written en statement shows that the brick but business was not dissolved and hence a prayer for dissolution was made. The reason is simple be cause there is a mere reference to the brick business in the plaint. The written en statement shows that the brick but business was not dissolved and hence a prayer for dissolution was made. In order to determine the will at question, when the right to sue accurate end to the defendant regarding the brick business, we shall have to go to the Indian Partnership Act. Section 43 of the Act is a settler on this because it lays down when a partnership at will is dissolved. Both the soap business and the brick business are partnerships at will, within the meaning of that section. In this case, no notice to dissolve the brick business was served by either partner. The case does not, therefore, come with in the purview of sub-section (1) there of. The filing of the plaint cannot be the date of dissolution of the brick business because there is no prayer for its dissolution. Hence, the receipt of the summons of that suit on 30-1-1973 by the defendant also cannot be treated as the date of the dissolution of the brick business. 11. THE written statement was filed on the 5th June, 1973, and in the para 14 thereof, though a counter-claim was made, there is no prayer for the dissolution of the partnership at will. Such prayer was subsequently made by filing an additional written statement and the prayer was allowed on the 22nd March, 1971. In the Supreme Court decision of Laxmidas vs. Nanabhai in 1964 (1) S.C.A. 529 at pages 537 and 538, this matter was considered. THEre a written statement was filed on the 18th October, 1951, and subsequently, some clarification was made in November, 1954, i.e., more than 3 years after the previous date. It has been stated that if the limitation for the purpose of the counter-claim would commence from the date of filing of the written statement on the 18th October, 1951, then the counter-claim would be within time. Where no fresh allegations are added or fresh reliefs sought for by an amendment and the amendment merely clarifies an existing pleading and does not in substance add to or alter it, there is no bar of limitation. It was, therefore, held that the counter-claim was to be treated as filed on the 18th October, 1951. Where no fresh allegations are added or fresh reliefs sought for by an amendment and the amendment merely clarifies an existing pleading and does not in substance add to or alter it, there is no bar of limitation. It was, therefore, held that the counter-claim was to be treated as filed on the 18th October, 1951. In the case of Rat Havendra Chaudhury vs. Rai Sourendra in 46 C.W.N. 882, it has been stated that limitation arises for the purpose of a. counter-claim from the date when the written statement is filed, vide the pages 885-886. 12. LET this test be applied here. In the paragraph 14 of the written statement that all the necessary averments have been made and only the prayer for dissolution was omitted. That point was only clarified by an amendment made in March, 1977, but thereby no fresh relief or allegation was added. There will be no bar of limitation unless' the partnership at will regarding the brick business was dissolved. That right to sue regarding the brick business accrued to him only from the 5 the June, 1973. So, it is held that the counterclaim is not time barred. The submissions made on behalf of the respondent cannot, therefore, be accepted. The trial court passed a wrong decree that the soap business would stand dissolution from the date of the decree. Rule 15 of Order 20 of the Code says that in the preliminary decree, the court shall have to declare the date on which the partnership shall stand dissolved or the deeming date of dissolution must be given. According to sub section (2) thereof, the date of communication of dissolution of those two partnerships will be the determining factor, it is, thus, held that the date of receipt of the summons, viz., 30th January, 1973, will be such date for the purpose of the soap business. Regarding the brick business, the relevant' date of dissolution is 5th June, 1973, as he made such communication to the plaintiff. The cross-objection and the civil revision filed also will fail. The appeal is allowed. The judgment and decree appealed against are set aside. The suit is decreed in a preliminary form with costs, it is hereby declared that the plaintiff and the defendant had 8 annas share each in the partnership "New Bombay Soap Factory" and the business stood dissolved from the 30th January, 1973. The appeal is allowed. The judgment and decree appealed against are set aside. The suit is decreed in a preliminary form with costs, it is hereby declared that the plaintiff and the defendant had 8 annas share each in the partnership "New Bombay Soap Factory" and the business stood dissolved from the 30th January, 1973. The defendant do render accounts regarding the assets and liabilities of that firm from May, 1971, to 30-1-1973, within one month from date. Should the defendant fail to do so, the plaintiff will be at liberty to apply for taking accounts with the help of a Pleader Commissioner. The defendants prayer for counter-claim is allowed, but in the circumstances, without costs. He do get a decree in a preliminary form. It is hereby declared that the defendant and the plaintiff each had equal share in the partnership "Das Gupta Brothers" That firm stood dissolved from the 5th June, 1973. The plaintiff do render accounts of the assets and liabilities of that firm to the defendant from 28th March, 1960 to 5th June, 1973, within one month. In default, the defendant will have the liberty to apply to the court for a final decree for taking such accounts with the help of a Pleader Commissioner. He must pay the proper court fees within 15 days, failing which that prayer shall stand dismissed. The cross-objection and the revisional application are dismissed without costs. Appeal allowed. No order as to costs. Cross-objection and revisional Applications dismissed without costs.