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2017 DIGILAW 2562 (MAD)

Edward Earth Movers, a Partnership firm v. S. Edward Raj

2017-08-10

A.D.JAGADISH CHANDIRA, R.SUBBIAH

body2017
JUDGMENT : R. SUBBIAH, J. 1. This Appeal has been filed against the final decree passed by the II Additional District Judge, Salem in O.S. No. 167 of 2011, dated 17.12.2015. 2. The Appellants are the Defendants and the Respondent is the Plaintiff. The suit was filed by the Respondent/Plaintiff for passing a preliminary decree for the dissolution of the partnership firm M/s. Edward Earth Movers and for a direction to the first appellant to render the accounts before the court and for passing a decree against the second appellant to pay a sum of Rs. 2,00,000/- to the respondent with future interest at the rate of 24% per annum and for cost of the suit. 3. The case of the Respondent/Plaintiff is that the respondent/plaintiff along with the second appellant/second defendant started a firm M/s. Edward Earth Movers, the first appellant/first defendant and in pursuance of which a partnership deed was entered into between the respondent/plaintiff and the second appellant/second defendant at Karumandurai, on 01.02.2011; that that object of the firm was to let out Earth movers, Boclaines, Excavators etc., on hire for contract work and other related works and the same was a partnership at Will; that the respondent/plaintiff had invested a total sum of Rs. 7,90,000/- by way of cheque bearing No. 228121 dated 03.02.2011, drawn on the South Indian Bank Limited, Salem, to M/s. SSS Equipment as advance for the purchase of a Hyundai Hydraulic Excavator, on behalf of the firm and further the respondent/ plaintiff invested a total sum of Rs. 2,00,000/- by way of cheque bearing No. 2281122, dated 04.02.2011, drawn on the South Indian Bank Limited, Salem, to M/s. Malcons Industrial and Mining Tools Co. Equipment as advance for the purchase of a Hydraulic Breaker and initially though it was agreed by the partners that they would invest equally, but the second appellant/second defendant insisted that the respondent/plaintiff pay the advances and that he would reimburse the respondent/plaintiff with half the capital; that subsequently the Hydraulic machines were purchased by the firm and were in the custody and governance of the second appellant/second defendant and that he was managing the day to day affairs of the firm; that the second appellant/second defendant also in his individual capacity borrowed a loan of Rs. 2 lakhs which was paid by the respondent/plaintiff to the second appellant/second defendant in his individual account by way of a RTOS Transfer on 25.02.2010, which is the second appellant/second defendant undertook to pay interest at the rate of 24% per annum; that since the second appellant/ second defendant failed to pay any amount either towards principal or interest. Hence a separate court fee was paid in the suit for recovery of the above amount of Rs. 2 lakhs. 4. The further case of the respondent/plaintiff is that since the second appellant/second defendant got control of managing the firm and the assets of the firm by gradually giving pinpricks and also started to burk all the affairs of the firm from the respondent/plaintiff and refused to show any accounts or transactions to the respondent/plaintiff in spite of his repeated demands; that since the second appellant/second defendant did not heed to any of the request of the respondent/plaintiff, the respondent/plaintiff issued a notice dated 21.07.2011 calling upon the second appellant/second defendant to render proper accounts and also claimed his share of the investments and also the loan given to the second appellant/second defendant, but he did not reply to the same; that again on 29.09.2011 the respondent/plaintiff issued another legal notice to the second appellant/second defendant calling upon him to render accounts and claiming his dues, even that notice was also not responded; that in any event of any loss to the said business and non repayment of loan amount to the company for the Hire Purchase made suppliers would result in legal consequences and the respondent/plaintiff would be held liable for no commission of his mistakes. In these circumstances, he was constrained to file the suit for preliminary decree as stated supra. 5. The second appellant/second defendant filed a written statement which was adopted by the first appellant/first defendant interalia contending that in fact the second appellant/ second defendant is basically agriculturist at Karumandurai, Attur Taluk, Salem District and also operating a small cloth merchant at Karumandurai; that the respondent/plaintiff is paternal uncle for the second appellant/second defendant and that the respondent/ plaintiff insisted him to purchase a Earth Movers, Boclaines, Excavators etc. for Hiring purpose to start a new business and earn money, but this appellant/defendant without knowing any technicality of mode of operandi, has initiated the new business along with the respondent/plaintiff; that at that time itself the second appellant/second defendant explained his position and expressed his willingness as a working partner in field work and accepted to put his entire efforts to promote the business and that the respondent/ plaintiff was admitted the position of the second appellant/second defendant and then the firm was dully registered and advance amount for purchase of earth movers was given by the respondent/plaintiff vide banking instrument and that the respondent/plaintiff had arranged the Hire Purchase from L & T Finance Limited for the balance value of the earthmover machineries based on the security documents submitted by the respondent/ plaintiff's property; that the second appellant/second defendant has taken entire care to run the earth movers with support of his family members and relatives but the respondent/plaintiff never took any part in the transaction of the firm from the inception; that the second appellant/second defendant had faced lot of difficulties to operate the business; that the second appellant/second defendant whenever invited the respondent/ plaintiff to take participate in the issue of the firm, he has refused to take part of the firm operation and gave lame excuses; that at the time of initiating the operation they have purchased the Earth movers, Boclaines, Excavators etc. from Puna and that the respondent/plaintiff offered to transport the same machineries from Puna to Karumandurai, but due to clerical mistake by the company, the machineries were transported to Muvattupuzha at Kerala State via Bangalore; that while entering into Manjeshwar Commercial Check post, Kamargod the authority detain the vehicle and directed to pay entry tax of Rs. from Puna and that the respondent/plaintiff offered to transport the same machineries from Puna to Karumandurai, but due to clerical mistake by the company, the machineries were transported to Muvattupuzha at Kerala State via Bangalore; that while entering into Manjeshwar Commercial Check post, Kamargod the authority detain the vehicle and directed to pay entry tax of Rs. 8,88,800/- on 25.03.2011 in DR No. 11071/2010-2011, but the respondent/plaintiff was refused to take any single steps to solve the issue and that the second appellant/second defendant approached the court of law by filing writ petition bearing W.P. (C) No. 10268/2011 and got two different orders from the High Court of Kerala at Ernakulam respectively on 31.03.2011 and 08.04.2011 and take back the vehicle without paying Tax; that the earthmover was rendering for hire at Kerala State from the inception and that the vehicle was periodically serviced by the Hydraulic and Breaker Company mechanical persons at the above said sites and this appellant/defendant never try to hidden the Earthmover at any point of time; that the appellant/defendant is paying the monthly due amount to the L & T Motor Finance Company periodically from the source of income from the above said vehicle and if it has lack in source, this appellant/defendant have been arranged the funds from the other source and paying the due amount to the Finance Company; that the respondent/plaintiff never turn to look into the affairs of the firm from the day of inception of the said firm; that at no point of time the appellant/defendant refused to show the accounts of the firm. Hence, the appellant/ defendant prays for dismissal of the suit. 6. Based on the above pleadings, the learned trial Judge framed issues and at the time of trial, plaintiff examined himself as PW-1 and marked 12 documents as Exs. A1 to A12. On the side of the defendants the second defendant examined himself as D.W.1 and marked 20 documents as Ex.B1 to B20. After considering the oral and documentary evidence adduced by the parties, the learned trial Judge passed a preliminary decree on 18.03.2013 and thereafter final decree was passed on 17.06.2015. 7. It is the contention of the appellants that the appeal was filed based on the docket order passed by the learned trial Court without passing the Judgment. The court below should have rendered judgment before passing the final decree. 7. It is the contention of the appellants that the appeal was filed based on the docket order passed by the learned trial Court without passing the Judgment. The court below should have rendered judgment before passing the final decree. However, in the present case, the learned trial Judge has passed a final decree in the docket of the final decree application without rendering the judgment. Therefore, the same is not legally sustainable. The learned counsel for the appellant further submitted that while delivering the preliminary decree the court below has observed that Exs.B15 and B16 cannot be stated as true accounts regarding financial transaction to the first defendant firm. But subsequently, based on the report of the Receiver the learned trial Judge has passed a final decree in the docket order relying upon Exs. B15 and B16 stating that the income found in Ex.B15 which is not legally sustainable and hence, the final decree passed by the learned trial Judge is liable to set aside and the matter has to be remitted back to the trial Court for passing fresh final decree. 8. The learned Senior Counsel for the Respondent also fairly submitted that the learned trial Judge has passed the final decree as a docket order without rendering judgment and hence the final decree passed by the learned trial Court is liable to be set aside and the matter has to be remitted back to the trial Court for passing fresh final decree. 9. We have considered the rival submissions and perused the final decree passed by the trial Court. 10. From the records, we find that the trial Court has passed a final decree in the form of docket order, where there is no judgment rendered by the trial Court. Hence, we are of the considered view that the final decree is liable to be set aside and the matter has to be remitted back to the trial Court. 11. From the records, we find that the trial Court has passed a final decree in the form of docket order, where there is no judgment rendered by the trial Court. Hence, we are of the considered view that the final decree is liable to be set aside and the matter has to be remitted back to the trial Court. 11. Accordingly, the appeal stands allowed and the final decree passed by the II Additional District Judge, Salem, in O.S. No. 167 of 2011, in the form of docket order dated 17.06.2015, is set aside and the matter is directed to be remitted back to the trial Court for passing a fresh final decree after affording sufficient opportunity to both the parties to adduce evidence and to cross-examine the witnesses and thereafter pass final decree by rendering judgment on merits and in accordance with law. The entire exercise shall be completed within a period of three months from the date of receipt of the order. No costs. Consequently, connected C.M.Ps. are closed. 12. At this juncture, it is represented by the learned Senior Counsel for the Respondent/ Plaintiff that since the suit pertains to render accounts, the trial Court may be directed to appoint a Chartered Accountant. The Respondent/Plaintiff is at liberty to raise the said contention before the trial Court at the time of trial and on such contention, the learned trial court shall consider the same.