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2022 DIGILAW 366 (TRI)

Chhanda Choudhury v. Bimalendu Chakraborty

2022-09-12

T.AMARNATH GOUD

body2022
JUDGMENT T.AMARNATH GOUD,J. - Heard Mr. Somik Deb, learned senior counsel assisted by Mr. H. Sarkar, learned counsel appearing for the appellants. Also heard Mr. S. M. Chakraborty, learned senior counsel assisted by Mr. A. Sengupta, learned counsel appearing for the respondents. [2] This second appeal, has been under Sec. -100 of the Code of Civil Procedure, 1908 , read with Order-XLII Rule-1 for reversing the impugned judgment and decree dtd. 25/11/2019 and 3/12/2019 respectively, passed by the learned District Judge, West Tripura, Agartala in connection with Title Appeal No.67 of 2016 and for restoring the judgment and final decree dtd. 29/8/2014 and 20/9/2016 respectively passed by the learned Civil Judge, Senior Division, Court No.2, West Tripura, Agartala in Title Suit No.54 of 2010. [3] At the time of admitting the appeal, the following substantial questions of law were formulated by this Court: "1. Whether the validity of the audit report, submitted by a Chartered Accountant can be scrutinized, in view of the statutory provisions contained in the Chartered Accountants Act, 1949? 2. Whether an appellate Court has any jurisdiction to return a finding, thereby interfering into any matter, which was specifically and categorically admitted by the appellant thereto in the trial Court? [4] The case of the appellants, in short, is that, the respondent No.1, as the plaintiff had instituted a title suit, marked as Title Suit No.54 of 2010, for dissolution of partnership and rendition of the accounts etc., before the learned Civil Judge, Senior Division, Court No.2, Agartala, West Tripura, impleading thereat, the appellants and the respondent Nos.2 and 3, pursuant whereto, a Chartered Accountant Firm was duly appointed for determining the shares of the partners. Thereafter, an Audit report was prepared and on relying on the same, the learned trial Court passed a decree, thereby determining the shares of each partner. Feeling aggrieved, and including new pleas and reliefs, the respondent No.1 had preferred an appeal before the learned District Judge, West Tripura, Agartala being Title Appeal No.67 of 2016 and by the impugned judgment and decree dtd. 25/11/2019 and 3/12/2019 respectively, the same was disposed of, thereby returning findings in furtherance of manifest errors of law. Assailing the same, the appellants have preferred the instant second appeal before this Court for further adjudication. 25/11/2019 and 3/12/2019 respectively, the same was disposed of, thereby returning findings in furtherance of manifest errors of law. Assailing the same, the appellants have preferred the instant second appeal before this Court for further adjudication. [5] The learned District Judge, based on the pleadings of both the parties and after interacting the arguments of the counsel for the parties has observed as under: "In view of above discussion, the appeal is hereby allowed. the impugned order dtd. 3/9/2016 passed by the learned Trial Court is hereby quashed so far it relates to the distribution of shares and preparation of final decree. The parties will get their respective share as per indication given above. Initially the current liabilities of Rs. Rs.21,92,340.00 will be met up from the current assets and fixed assets and thereafter, Rs.55,42,216.00 will be distributed to the plaintiff, defendant no.2 and legal representatives of defendant no.3 at the ratio 4 : 4 : 2 (i.e. 40%, 40% and 20% respectively).Whenever, any amount from Sundray Debtors, security deposits, D-call money or loan refundment from Sukumar Majumder, or any part thereof will be received, same will also be distributed to the parties as per above said ratio or percentage. If during pendency of the lis or thereafter till distribution of assets, any party receives or has received any amount from the assets of the Firm r from any partner, same will be adjusted/set off accordingly. [6] The learned Civil Judge, Senior Division, after interacting the arguments of the learned counsel appearing for the parties and perusal of the material documents has held thus: "In the result, the TS. 54/2010 stands decreed on contest with cost. The partnership firm under name and style "Maa Sarada Devi Industires" stands dissolved on and from 21/6/2010. The proportionate share of the parties is declared at ratio of 40% (plaintiff namely Sri Bimalendu Chakraborty), 40% (defendant no.2 namely Sri Sunit Das) and 20% (defendant no.3-Counter Claimant, namely Sri Srimanta Majumder). Accounts of the MSD Industries is to be taken within a period of 3(three) months by appointing a Commissioner having knowledge of accounts/ Chartered Accountant in terms of the Deed of Partnership and as per rules prescribed in Sec. 48 and the sec. Accounts of the MSD Industries is to be taken within a period of 3(three) months by appointing a Commissioner having knowledge of accounts/ Chartered Accountant in terms of the Deed of Partnership and as per rules prescribed in Sec. 48 and the sec. 49(if situation arises) of the Indian Partnership Act,1932 failing which each party to the suit shall be at liberty to approach the Court to have the final decree prepared according to Law." [7] Being aggrieved by and dissatisfied with the above impugned judgment and decree dtd. 25/11/2019 and 3/12/2019 respectively, passed by the learned District Judge, West Tripura, Agartala, the appellants hereby have preferred this present appeal before this Court. [8] Mr. S. Deb, learned senior counsel assisted by Mr. H. Sarkar, learned counsel appearing for the appellants has submitted that the learned Appellate Court misunderstood the pleadings of the parties in arriving at the impugned judgment and decree dtd. 25/11/2019 and 3/12/2019 respectively passed in T.A. No.67 of 2016. The learned Court below has committed manifest error of law in appreciating that the learned Appellate Court has no jurisdiction to interfere the matter which specifically and categorically admitted by the respondent No.1 through his written statement in response to the Audit report dtd. 30/5/2016 (Annexure-5), submitted by the Chartered Accountant Firm. [9] It has further been submitted that the learned Appellate Court has no jurisdiction to go beyond the disputes, raised by the respondent No.1 be3fore the learned Trial Court and the learned Appellate Court has only the jurisdiction interfere the portion of disputes, freshly raised by the respondent No.1. The obligation of the learned Appellate Court was to remain confined only within the disputes raised by the respondent No.1, the appellant herein. [10] The learned Appellate Court has committed manifest error of law in appreciating that the balance sheet as on 10/7/2008, contained in the Audit Report dtd. 30/5/2016 (Annexure-5) was prepared by the duly appointed chartered accountant firm, which decided the final and total entitlement of each of the partners, the respondent No.3 and 1 and the original appellant as Rs.38,29,958.00, Rs.26,55.864 and Rs.24,14,712.00 respectively, taking into account the entire liability and assets of the partnership firm in question, and finally, concluded the actual position stating the partners' capital account. Neither the audit report dtd. 30/5/2016 submitted by the chartered accountant firm nor the final decree dtd. Neither the audit report dtd. 30/5/2016 submitted by the chartered accountant firm nor the final decree dtd. 20/9/2016 remotely suggest for recovery of liability from any of the partners, per contra, the Audit Report dtd. 30/5/2016 clearly equated the entire liability by taking into account the cash in hand as well as the assets of the partnership form in question. The partners' capital as shown in the balance sheet as on 10/7/2008, contained in the audit report dtd. 30/5/2016 would not be as per ratio of share 40:40:20 due to withdrawal of their share capital. [11] He has submitted that the learned Appellate Court has committed an error of law by not taking into account the written statement submitted by the respondent No.1 in response to the Audit Report dtd. 30/5/2016 wherein, he has admitted that the Audit Report dtd. 30/5/2016 rightly decided the respective entitlements of the partners. By accepting new pleas, which are beyond the averments pleaded in the written statement, submitted by the respondent No.1, in response to the audit report dtd. 30/5/2016. It is settled principle of law that impleadment of new facts at the appellate stage is barred by law, but in the present case, the same was considered, consequent whereto, the entire matter was reshuffled. [12] The learned Appellate Court has committed an error of law by deciding that the matter of sundry debtors, security deposits, D-call, loan refund from Sukumar Majumder and any part thereof, would be received, same will be distributed to the partners according to their ratio is wholly impossible since the firm M/s Maa Sarada Devi Industries has got no existence at all. The new claim raised by the respondent No.1 to the effect that the sum of Rs.14,22,085.02 to be divided among all the partners in the ratio of 4:4:2 was wholly unsustainable, being not claimed for in the Title Suit. [13] Furthermore, being agreed with the entitlement of each of the partners i.e. the respondent No.3, 1 and the original appellant as Rs.38,29,958.00, Rs.26,55,864.00 and Rs.24,14,712.00 respectively, taking into account the entire liability and assets of the partnership firm in question, the respondent No.1 had submitted the written statement in response to the audit report dtd. 30/5/2016 and hence, any deviation thereof cannot form the substratum of filing an appeal. 30/5/2016 and hence, any deviation thereof cannot form the substratum of filing an appeal. [14] The learned Appellate Court has committed grave error of law in appreciating that the purview of review by the chartered accountant firm was from the period stretching from 5/1/2002 to 10/7/2008 and in the audit report dtd. 30/5/2016, it has been recorded that since, the transaction of the said amount of Rs.14,22,085.02 was made with the appellants before 5/1/2002, and there were no authenticated or dependable accounts of that period and hence, the chartered accountant firm has not accepted the deduction of the said amount from the capital of the appellants, and the same was not interfered with by the learned trial Court. [15] He has drawn attention to the observation of the learned Appellate Court and has averred that such modification or interference were not sought for by the respondent No.1 while preferring or contesting the title appeal. While the audit report dtd. 30/5/2016, the entitlements of each partner of the partnership firm were finalized by the chartered accountant firm, after considering all liabilities and assets, cash in hand etc., which the respondent No.1 had also duly admitted by stating that the chartered accountant firm had rightly decided the entitlements of each partner as stated in the balance sheet as on 10/7/2008, which was finally accepted by the trial Court, the learned Appellate Court by going beyond all these aspects and by interfering the decree, passed the learned trial Court, has committed obvious error of law. [16] Mr. Deb, learned senior counsel has vehemently argued that the reports prepared by any registered chartered accountant firm are immune and outside the scope of judicial review, and hence, the impugned judgment and decree dtd. 25/11/2019 and 3/12/2019 respectively, passed in deviation of the Audit Report dtd. 30/5/2016 (Annexure-5), is bad in law and merits to be quashed and set aside. [17] He has submitted that the learned Appellate Court has committed obvious error of law in appreciating that an audit report, submitted by a chartered accountant, determining the shares, as to the secured and unsecured assets, cannot be interfered with, in the absence of a finding that such Audit Report is incorrect and the chartered accountant is grossly negligent in preparing the report and such audited report submitted by the chartered accountant does not disclose the true accounting of the assets secured and unsecured. The validity of the audit report submitted by a chartered accountant cannot be scrutinized in view of the specific statutory provisions, contained in the Chartered Accountant Act, 1949. [18] He has further argued that when a chartered accountant has prepared an audit report, thereby determining the respective shares of the members of a partnership firm, determination of such shares in the audit report cannot be interfered with, without impleading the chartered accountant in such proceeding. [19] Admittedly, the partnership sought to be dissolved is a partnership at will and shares of the parties therein stood at the ratio of 40: 40: 20. It is further admitted position of the fact that the partnership business has been closed and the assets of the partnership are lying idle without any production and, therefore, the partnership firm became defunct and also, therefore, we are of the opinion that it is just an equitable that the firm should be dissolved. Order-XX Rule-15 of CPC states about the dissolution of partnership. Rule 15 of CPC casts a duty on the Court to pass a preliminary decree declaring the proportionate share of the parties fixing the date on which the partnership shall stand dissolved or be deemed to have been dissolved and to issue direction that accounts of the firm to be taken and other acts to be done. [20] Admittedly, the defendant No.2 vide his notice, dated 11-06- 2008 as per provision of Clause-11 of the Deed of Partnership expressed his desire to retire from the firm in reply whereof the defendant No.3 informed the plaintiff and the defendant No.2 vide his letter, dated 18-06- 2008 to settle the accounts. It, therefore, appears that the parties were/ are at will to dissolve the firm but no notice was served to that effect expressing their respective desire to dissolve the firm. The intention/desire of a particular partner to retire from the firm does not, ipso facto, lead to dissolution of firm. Apart from this, the process of communicating letters, as aforesaid, having come to an end vide., amicable resolution dtd. The intention/desire of a particular partner to retire from the firm does not, ipso facto, lead to dissolution of firm. Apart from this, the process of communicating letters, as aforesaid, having come to an end vide., amicable resolution dtd. 17/11/2009 (Exbt.B) could not be acted upon and thereby led the plaintiff to knock the door of this court to have the firm dissolved, therefore, the dates of expression of intention/desire of the partners through letters of various dates or the date of arriving at the amicable resolution cannot be taken or held as of the day of dissolution of the firm. [21] Necessarily, we find it apposite to refer to the Sec. -48 of the Indian Partnership Act wherein it has been provided, inter alia, the mode of settlement of accounts after the dissolution of partnership. The text of Sec. -48 runs as under :- "48. Mode of settlement of accounts between partners. In settling the accounts of a firm after dissolution, the following rules shall, subject to agreement by the partners, be observed :- (a) Losses, including deficiencies of capital, shall be paid first out of profit, next out of capital, and, lastly, if' necessary, by the partners individually, in the proportions, in which they were entitled to share profits: (b) The assets of the firm, including any sums contributed by the partners to make up deficiencies of capital, shall be applied in the following manner and order: (i) In paying the debts of the firm to third parties; (ii) In paying to each partner rate ably what is due to him from the firm for advances as distinguished from capital; (iii) In paying to each partner rate ably what is due to him on account, of capital; and (iv) The residue, if any, shall be divided among the partners in the proportions in which they were entitled to share profits." [22] In view of above discussion and observation and also with the consent of both the learned counsel appearing for the parties, this Court is of the considered opinion that the decree may be drawn up in tune of the chartered account report. The orders passed by the Court below which has been modified by the learned Appellate Court stands modified upholding the report filed by the chartered accountant dtd. 30/5/2016 (Annexure- 5). The orders passed by the Court below which has been modified by the learned Appellate Court stands modified upholding the report filed by the chartered accountant dtd. 30/5/2016 (Annexure- 5). Both the learned counsel appearing for the parties have given their consent that if the report of the chartered accountant is followed, there will not be any grievance. [23] Accordingly, the appeal stands allowed to the extent as indicated above. Draw the decree accordingly by upholding the Chartered Accountant report and send down the LCRs thereafter. [24] As a sequel, miscellaneous applications pending, if any, shall stand closed.