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2013 DIGILAW 767 (RAJ)

LRs. of Ram Prashad v. Maya Devi

2013-04-16

ARUN BHANSALI

body2013
JUDGMENT ARUN BHANSALI, J. 1. This first appeal has been preferred by the defendant aggrieved against the judgment and preliminary decree dated 19-4-1984 passed by the Additional District Judge No.2, Hanumangarh (the trial Court), whereby, plaintiffs suit for rendition of accounts has been decreed. 2. The facts in brief are that the plaintiff Smt. Maya Devi filed a suit for rendition of accounts and for payment of her share from the said accounts, inter alia, with the averments that a firm in the name of M/s. Ram Prashad Amrit Lal was constituted between the plaintiff and defendant Ram Prashad, whereby, the head office was situated at village Tibbi, Tehsil Tibbi for running brick kiln and for sale of bricks and tiles on 7-7-1964 and a partnership deed, in this regard, was executed on 19-4-1965. The original documents relating to the partnership and its registration certificate were with the defendant. The partners had agreed to share profit and loss at 50% each and each partner was entitled to 12% interest on the capital. 3. It was then claimed in the plaint that first of all in 1964 land was procured from the State Government for setting up of brick kiln and the same was operated in partnership and bricks and tiles were sold after manufacturing. The said brick kiln was closed and entrie accounts were taken and thereafter in the said partnership firm another land was procured in village Talwara, Tehsil Tibbi and a new brick kiln was established and there also bricks and tiles were manufactured and sold. The said manufacturing continued till 1972-73 and thereafter the brick kiln was closed down. After closing down the brick kiln in the year 1972-73, the sale of bricks and tiles manufactured at the brick kiln, the left out coal and fuel and other goods relating to the kiln continued. 4. It was further averred that the entire business was being looked after by the defendant and entire books, records and accounts were in the possession of the defendant, who used to maintain the same and was the Manager of the business. As the plaintiff was a widow and illiterate and she had full faith in the defendant, so also, she was not competent enough to actively participate in the business and/or maintain the books, therefore, the entire accounts and records always remained with the defendant. 5. As the plaintiff was a widow and illiterate and she had full faith in the defendant, so also, she was not competent enough to actively participate in the business and/or maintain the books, therefore, the entire accounts and records always remained with the defendant. 5. It was then alleged in the plaint that after closing down of the brick kiln in the year 1972 and sale of the bricks, tiles, fuel and other goods relating to the kiln, the plaintiff requested the defendant to show the entire record and the books of the firm and she be paid her a valid dues. When the defendant gave copy of the statement based on the books of the firm relating to the years 1971-72, 1972-73 and 1973-74 on 7-9-1976, according to the said accounts in the year 1972-73 the plaintiff had a deposit of Rs. 42,037.17 paisa with the firm, in the year 1973-74 it was shown that out of the said amount Rs. 35,000/- had been paid to the firm M/s. Ram & Company, with which, the plaintiff has nothing to do and the rest of the amounts in the year 1973-74 were wrongly debited in her account and the same has been squared up on 16-6-1975, when in fact she had not been paid anything even as per the said account. 6. It was further averred that from the statement of account for the year 1973-74, it is clear that the books were being maintained till 16-6-1975 and on 16-6-1975 the books and accounts of the brick kiln were closed and amount were debited in plaintiffs account and the same was closed. It was averred that based on the said books, the plaintiff demanded a sum of Rs. 42,037.17 paisa from the defendant, who kept on postponing the said payment for one reason or the other and ultimately the plaintiff was left with no alternative but to give notice dated 2-6-1978 and dissolved the firm. By another notice seeking accounts and her share from the partnership firm business had already been given on 16-3-1978, however, the defendant had refused to make any payment and, therefore, the cause of action arose. Ultimately, it was averred in the plaint that it is clear from the copy of the accounts delivered by the defendant that a sum of Rs. Ultimately, it was averred in the plaint that it is clear from the copy of the accounts delivered by the defendant that a sum of Rs. 42,037.17 paisa were due in favour of the plaintiff and in subsequent years, the said amount has wrongly been appropriated and that she is entitled to her share on account of dissolution of the firm by notice dated 2-6-1978. The suit was within limitation and it was prayed that the suit be decreed. 7. A written statement was filed by the defendant Ram Prashad, whereby, the averments made in the plaint were specifically denied. While execution of partnership deed dated 19-4-1965 was admitted, it was denied that partnership was constituted between the plaintiff and defendant. It was claimed that at the request of Mohan Lal and Hardayal Mal, who were partners of the firm M/s. Hardayal Mal Vijay Kumar, Commission Agent, they wanted to introduce the name of the plaintiff, who was widow of their brother Bihari Lal for saving income tax. The plaintiff did not participate in the business and the business was being looked after by the defendant and Mohan Lal and plaintiffs son Amrit Lal, whose guardian was Hardayal Mal. The defendant also claimed that he never met the plaintiff, her name was introduced benami for Mohan Lal and Hardayal Mal. It was claimed that the accounts were settled between the defendant and Mohan Lal for the brick kiln at Tibbi and the brick kiln at Talwara was continued in the said firm as per the consent of Amrit Lal. The fact of books being maintained by the defendant was admitted, but it was claimed that the same was done at the instance of Mohan Lal and Amrit Lal. 8. It was then admitted that the brick kiln business came to an end in the year 1972-73 and the accounts were settled between defendant and Mohan Lal and Mohan Lal got transferred Rs. 35,000/- to the firm M/s. Ram & Company, to which, besides the defendant Milkhi Ram, Shanker Lal and Som Prakash were the partners, which came into existence in place of the firm M/s. Ram Prashad and Amrit Lal and at best she can claim the amount of Rs. 35,000/- from the said firm M/s. Ram & Company and the plaintiff had no cause against the defendant. 35,000/- from the said firm M/s. Ram & Company and the plaintiff had no cause against the defendant. It was also claimed that the statements were not delivered by the defendant, but the same had been obtained by the plaintiff from the Income Tax Department. It was also averred that from the said firm M/s. Ram & Company the entire amount has been paid off to the legally entitled persons. It was denied that the suit was within limitation. 9. In the additional pleas, a plea was raised that the partnership was meant for specific adventure i.e. brick kiln at Tibbi and which came to an end in the year 1969 and, therefore, after passage of 14 years the suit was not maintainable. Ultimately, it was prayed that the suit be dismissed. 10. The trial Court framed as many as nine issues. On behalf of the plaintiff, she was examined as PW-1 and her son Amrit Lal was examined as PW-2 and on behalf of the defendant, the defendant was examined as DW-1, Kundan Lal as DW-2, Harnek Ram as DW-3, Shanker Lal as DW-4 and Manphool Ram as DW-5 and in rebuttal evidence Mohan Lal was examined as PW-3. 11. The trial Court after hearing the parties on various issues came to the conclusion that the firm was constituted between the plaintiff and the defendant in the name of M/s. Ram Prashad Amrit Lal, which was a registered partnership firm. A sum of Rs. 35,000/- said to have been paid to M/s. Ram & Company, has no connection with the plaintiff. There was no requirement of the plaintiff to file a suit against the said M/s. Ram & Company and the suit was within limitation. The issues relating to the lack of cause of action were not pressed, the firm did not stood dissolved at the end of five years and that the plaintiff was entitled to the relief as prayed in the plaint and ultimately passed preliminary decree in favour of the plaintiff and appointed Commissioner for taking the accounts. 12. It was contended by learned counsel for the appellant that the judgment and decree passed by the learned trial Court is ex facie against the settled position of law and against the evidence available on record and, therefore, the same deserves to be quashed and set aside. 12. It was contended by learned counsel for the appellant that the judgment and decree passed by the learned trial Court is ex facie against the settled position of law and against the evidence available on record and, therefore, the same deserves to be quashed and set aside. It was submitted that the partnership was entered into for a specific venture i.e., for running brick kiln at village Tibbi for a period of five years, as the land had been leased out by the State Government for the period of five years only, which is evident from the partnership deed (Exhibit-A/1) and, therefore, the partnership came to an end in the year 1969 itself in terms of provisions of Section 42(b) of the Partnership Act, 1932 (the Act) and filing of the suit after a passage of nine years is ex facie time barred. 13. Reliance was placed on judgment of Hon’ble Supreme Court in Gherulal Parakh v. Mahadeodas Maiya & Ors., AIR 1959 SC 781 . 14. It was then submitted that in any case once the accounts, even according to the plaintiffs own admission, had been submitted for the years 1971-72, 1972-73 and 1973-74 vide Exhibits-7, 8 and 9; there was no question of thereafter maintaining the suit for rendition of accounts. 15. It was then contended that the plaintiff herself had admitted in her statement that she had told the defendant after the business at Talwara that she does not want to do any business in partnership, which necessarily means that the firm stood dissolved in the year 1972-73 in terms of Section 40 of the Act and, consequently, the sending of notice dated 2-6-1978 seeking to dissolve the partnership firm was of no consequence and the suit was ex facie barred by limitation for more than one reason. It was also submitted that even as per the accounts (Exhibits-7, 8 and 9), it was clear that entire account of the plaintiff stood squared up and, therefore, also she had no cause to file the suit and the suit deserves to be dismissed on that count also. Ultimately, it was prayed that the appeal be allowed with costs. 16. Reliance was placed on judgment of Hon’ble Supreme Court in Saligram Ruplal Khanna & Anr. v. Kanwar Rajnath, (1974) 2 SCC 642 : AIR 1974 SC 1094 . 17. Ultimately, it was prayed that the appeal be allowed with costs. 16. Reliance was placed on judgment of Hon’ble Supreme Court in Saligram Ruplal Khanna & Anr. v. Kanwar Rajnath, (1974) 2 SCC 642 : AIR 1974 SC 1094 . 17. Learned counsel for the respondent vehemently opposed the submissions made by counsel for the appellant. It was submitted that the entire conduct of the appellant-defendant is full of contradictions and the attempt on his part is to some how avoid his liability to make lawful payment to the plaintiff is writ large on the record of the case. It was further submitted that the suit was well within limitation as provided under Article 5 of the Limitation Act, 1963 (the Act of 1963’) and the notice dated 2-6-1978 was rightly issued seeking dissolution of partnership firm in terms of Section 43 of the Act. Ultimately, it was prayed that the appeal filed by the appellant be dismissed with costs. 18. I have considered the rival submissions made by learned counsel for the parties and have gone through the record of the case. 19. At the outset, it has to be noticed that the case of the plaintiff was specifically based on the partnership deed (Exhibit-A/1), the accounts submitted by the defendant on 7-9-1976 for the years 1971-72 (Exhibit-7), 1972-73 (Exhibit-8) and 1973-74 (Exhibit-9) as well as notice of termination of partnership dated 2-6-1978 (Exhibit-1). The first version of the defendant was the reply to another notice dated 15-3-1978 (Exhibit-3), which reply was given on behalf of the defendant on 30-3-1978 (Exhibit-6), whereby, the plea regarding the plaintiff being benami was raised and it was also claimed that the account has been shown to Amrit Lal son of the plaintiff and rest of the averments were denied. 20. However, in the written statement as well as in the evidence produced by the defendant, for the first time, the defendant came out with the version that the partnership stood dissolved on completion of the specific adventure in the year 1969, in any case with the statement of plaintiff that she did not want to continue with the partnership business after the Talwara brick kiln in the year 1972-73 and that the accounts were shown to her in the presence of her son. The said contradiction in the plea, statement and evidence clearly goes to show that the defendant had taken various pleas only with a view to negate the claim of the plaintiff. The defendant went on the allege that the statements Exhibits-7, 8 and 9 were procured by the plaintiff from the Income Tax Department, whereas, the said documents contain the signatures of the defendant and the same being in original, cannot be said to have been procured from the Income Tax Department and the same has in fact been delivered by the defendant to the plaintiff only. 21. The plea raised by the appellant-defendant that in terms of provisions of Section 42(b) of the Act, the partnership stood dissolved in the year 1969 itself as the same was constituted for specific adventure i.e. to operate brick kiln at village Tibbi and, consequently, the suit filed in the year 1978 was barred by limitation has no substance. 22. The provisions of Section 42(b) of the Act provides that a partnership firm is dissolved subject to contract between the partners if constituted to carry out one or more adventures or undertakings, by the completion thereof. The relevant portion of the partnership deed Exhibit-A/1 reads thus:- PARTNERSHIP-DEED This deed of partnership is made on this Nineteenth day of April, 1965 between (1) Ramprasad S/o L. Milkhiram Agarwal, aged 40 yrs., R/o Tibi (Hanumangarh Tehsil in Ganganagar District, Rajasthan) and (2) Maya Devi W/o Late Beharilal Agarwal, aged 32 yrs. R/o Hanumangarh Town (Ganganagar District, Rajasthan) hereinafter called the First Party and Second Party respectively. WHEREAS the parties joined as partners and started a firm in partnership for running a kiln taken on a lease for five years from Bhakhara Colonization Department for manufacturing bricks and tiles in partnership at Tibi (Hanumangarh Tehsil in Ganganagar District) on 7-7-64 under the name and style of Messrs. Ramprasad Amrit Lal, Tibi on the terms and conditions mutually settled between them and whereas since then they have been acting upon them as partners and whereas to avoid any future disputes and complications, the partners now desire to reduce in writing on proper stamp paper those terms and conditions upon which they propose to set as partners in future also and to hereby agree to abide by them as under for themselves, their legal heirs or representatives, excutors or administrators; 1. That the partnership business shall be carried on under the name and style of Messrs. Ramprasad Amrit Lal and the principal place of business shall be at Tibi (Hanumanagarh Tehsil). 2. That the partnership business shall be that of manufacturing bricks and tiles and selling them and their products in the market but the nature and scope of partnership business may be varied by mutual consent from time to time and the partners may also open any number of branches for any type of business under any name at any place. 3. That the profits and losses of the partnership business shall be divided as under: 1. Ramprasad 1st Party 50 N.P. in a rupee and 2. Maya Devi 2nd Party 50 N.P. in a rupee. 4. That so far possible the requisite finance for the business of the firm shall be arranged by the partners who may charge interest @ 12% per annum on their investments in the firm. 5. That the partnership is a partnership-at-will. 23. From a bare reading of the above partnership deed, it is apparent that the fact of starting a firm in partnership for running kiln on land taken on a lease for five years from Bhakhra Colonization Department was indicated only as a preamble to the partnership deed and the Clause-2 specifically provided that the partnership business shall be that of manufacturing bricks and tiles and selling them and their products in the market but the nature and scope of partnership business may be varied by mutual consent from time to time and the partners may also open any number of branches for any type of business under any name at any place and Clause-5 specifically provided that the partnership is a partnership at will, therefore, to rely on the preamble to contend that the partnership was formed for specific adventure by ignoring provisions of Clauses 2 and 5 (supra) is baseless and the contention is, therefore, rejected. 24. In Gherulal Parakh (supra) relied on by the counsel for the appellant, it was found by Hon’ble Supreme Court as a fact that the partnership was constituted to carry out contracts with specified persons during a particular season and as the said contracts were closed, the partnership was dissolved. 24. In Gherulal Parakh (supra) relied on by the counsel for the appellant, it was found by Hon’ble Supreme Court as a fact that the partnership was constituted to carry out contracts with specified persons during a particular season and as the said contracts were closed, the partnership was dissolved. The Hon’ble Supreme Court observed as under:- It follows from the said findings that the partnership was only in respect of forward contracts with two specified individuals and for a particular season. But it is said that the said findings were not based on any evidence in the case. It is true that the documents did not clearly indicate any period limiting the operation of the partnership, but from the attitude adopted by the defendants in the earlier suit ending in an award and that adopted in the present pleadings, the nature of the transactions and the conduct of the parties, no other conclusion was possible than that arrived at by the High Court. It so, S. 42 of the Partnership Act directly applies to this case. Under that section in the absence of a contract to the contrary, a firm is dissolved, if it is constituted to carry out one or more adventures or undertakings, by completion thereof. In this case, the partnership was contituted to carry out contracts with specified persons during a particular season and as the said contracts were closed, the partnership was dissolved. 25. However, in the present case from the terms and conditions of the partnership deed Exhibit-A/-1, conduct of the parties and evidence on record, it cannot be said that the partnership was formed for specific adventure and consequently the said judgment is of no help to the appellant. 26. The next plea raised by the appellant relates to so called admission of the plaintiff in her statement that she told the defendant that she was not interested in continuing with the partnership business after the brick kiln business was over at Talwara. It is contended that business was over in the year 1972-73 and once the plaintiff, who is one of the two partners expressed her desire not to continue with the business in partnership, the same stood dissolved in terms of Section 40 of the Act and, therefore, it cannot be claimed by the plaintiff that the partnership stood dissolved by the issuance of notice dated 2-6-1978. Though the said plea raised by the appellant is in direct contradiction to its foundational plea that the plaintiff was only a benami, still even if her statement that she did not want to continue with the partnership business after the Talwara venture is accepted, in terms of Section 40 of the Act, it cannot be said that the partnership came to an end. 27. Section 40 of the Act provides as under:- 40. Dissolution by agreement. A firm may be dissolved with the consent of all the partners in accordance with a contract between the partners. 28. A bare reading of the above provision reveals that a firm may be dissolved with the consent of all the partners or in accordance with a contract between the partners. This is not the case of the defendant that when the plaintiff allegedly expressed her desire to put an end to the partnership in the year 1972-73, the defendant had agreed, as the agreement of all the partners is sine quo non for coming into operation of provisions of Section 40 of the Act. Neither such a plea has been raised nor the same could be raised in view of the foundational plea indicated hereinbefore. Consequently, the said plea raised by the appellant also has no substance. 29. The next argument raised by the appellant that once the accounts vide Exhibits-7, 8 and 9 had been delivered to the plaintiff, there was no occasion for filing a suit for rendition of accounts is also baseless. Once the accounts delivered vide Exhibits-7, 8 and 9 are disputed and the statement of account contains entries, which has nothing to do either with the partnership business and/or with the partners, it is well within the right of a partner to seek rendition of accounts by ignoring those baseless and incorrect entries, which as per the plaintiffs contention have wrongly been incorporated and/or indicated in the accounts of books. 30. The various pleas raised by the appellant were raised with a view to non-suit the plaintiff on account of limitation first on plea based on Section 42(b), then plea based on Section 40 of the Act and also plea based on its so called rendition. Admittedly, as noticed above, the partnership was a partnership at will as evident from Clause-5 of the partnership deed (Exhibit-A/1). Section 43 of the Act reads as under:- 43. Admittedly, as noticed above, the partnership was a partnership at will as evident from Clause-5 of the partnership deed (Exhibit-A/1). Section 43 of the Act reads as under:- 43. Dissolution by notice of partnership at will. (1) Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm. (2) The firm is dissolved as from the date mentioned in the notice as the date of dissolution or, if no date is mentioned, as from the date of the communication of the notice. 31. The said provision provides that where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm and the firm is dissolved as from the date mentioned in the notice as the date of dissolution and if no such date is mentioned from the date of communication of the notice. The plaintiff gave notice (Exhibit-1) dated 2-6-1978 for dissolution of the partnership firm and as already held above the partnership was still subsisting on the said date as the same neither stood dissolved in terms of Section 42(b) nor in terms of Section 40 of the Act, the same stood dissolved only by the notice dated 2-6-1978 (Exhibit-1). 32. Article 5 of the Act of 1963 provides for a period of three years as limitation for filing suit for rendition and the period of three years being to run from the date of dissolution of the dissolved partnership. The suit in the present case was filed on 3-7-1978 and cause of action in terms of Article 5 arose on 2-6-1978 and, therefore, it cannot be said that the suit was barred by limitation. 33. In any case admittedly the accounts Exhibits-7, 8 and 9 were delivered by the defendant to the plaintiff on 7-9-1976 and the suit was admittedly filed within three years from the said date and on that count also, it cannot be said that the suit was barred by limitation. 34. 33. In any case admittedly the accounts Exhibits-7, 8 and 9 were delivered by the defendant to the plaintiff on 7-9-1976 and the suit was admittedly filed within three years from the said date and on that count also, it cannot be said that the suit was barred by limitation. 34. The reliance placed by the learned counsel for the appellant on the case of Saligram Ruplal Khanna (supra) in this regard is misplaced as in the said case it was found as a fact by Hon’ble Supreme Court that partnership in the case before Hon’ble Supreme Court was for a fixed period of five years and the suit was filed after three years from the expiry of the said five years and consequently the same was found to be barred by limitation. The Hon’ble Supreme Court held thus:- 28. It is, in our opinion, not necessary to dilate upon this aspect of the matter because in any case there can be no manner of doubt that the firm of SAMCO got dissolved and was not subsisting after 30-8-1957 which was the date on which the period of five years for which the partnership had been formed came to an end. The question as to whether the firm got dissolved earlier than August 30, 1957 is purely academic and is not of much significance, because in any event in the absence of a contract to the contrary there could be no survival of the firm after August 30, 1957, when the period of partnership expired. Calculating the period of limitation even from the date, the suit for rendition of accounts brought by the appellants on December 20, 1960 was barred by limitation. It is not disputed that the period of limitation for such a suit is three years from the date of dissolution. 35. However, in the present case, it has already been concluded that the partnership was dissolved with giving of notice Exhibit-1 on 2-6-1978 and not on any date before the said date and consequently it cannot be said that the suit was barred by limitation. 36. Now coming to the plea raised by the defendant regarding payment of the sum of Rs. 35,000/- to M/s. Ram & Company and various other adjustments as claimed in the statement of accounts for the year 1973-74. 36. Now coming to the plea raised by the defendant regarding payment of the sum of Rs. 35,000/- to M/s. Ram & Company and various other adjustments as claimed in the statement of accounts for the year 1973-74. By defendants own admission that plaintiff and Mohan Lal, her brother-in-law had nothing to do with the said firm M/s. Ram & Company and, therefore, as there was no privity between the said M/s. Ram & Company and the plaintiff, the said payment, if any, made by the firm, which was admittedly controlled by the defendant, cannot be taken into consideration at all. Further, Mohan Lal, who appeared in the witness box in rebuttal evidence as PW-3 has also been specifically denied giving any instructions in this regard. 37. In that view of the matter, the so called plea regarding adjustments of Rs. 35,000/- by way of deposit with M/s. Ram & Company, which fact is sought to be proved by production of books of M/s. Ram & Company is of no consequence and, therefore, the said plea also being baseless deserves to be rejected. 38. From what has been discussed hereinbefore, the appellant has failed to make out any case for interference in the well reasoned judgment of the trial Court on any of the issues. The various pleas raised by the appellant have no substance and the appeal is, therefore, dismissed. No costs. 39. During pendency of the appeal vide order dated 29-8-1984 it was directed that the trial Court and the Commissioner shall proceed with the taking of accounts and the determination of the amount due, but the final decree shall not be passed. The trial Court shall now proceed with the preparation of the final decree expeditiously as the suit is of the year 1978 and more than 35 years have since elapsed. Appeal dismissed.