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Nathubhai Ichharam Vs. Narayanacharya Ramacharya - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberFirst Appeal No. 410 of 1925
Judge
Reported inAIR1927Bom470; (1927)29BOMLR937
AppellantNathubhai Ichharam
RespondentNarayanacharya Ramacharya
Excerpt:
.....of parties, but an issue was raised only on the second point. the trial court having overruled the objection and passed a decree, the same contentions were raised in appeal :-;(1) that though the objection as to misjoinder must be deemed to have been waived under order ii, rule 7, of the civil procedure code, still there was no substance in the objection, for neither was rule 4 applicable as the basis of both claims was title and refusal to deliver up the property on demand, nor did rule 5 apply as the defendant was sued in his representative capacity as an executor;;(2) that the objection as to non-joinder was not tenable, for ratansi was not a necessary party to the suit, since the suit did not involve a full partnership account but only the ascertainment of the assets..........first point taken on his behalf is that there has been misjoinder and non-joinder vitiating the suit. this objection arises out of the relief sought by the plaintiff' in regard to a partnership business, in which the deceased was one of the partners, the other two partners were defendant no. 1 and one ratansi, who was not made a defendant in the suit, although he was alive when it was brought. he has since died. the plaintiff seeks accounts of this partnership business and the subordinate judge has directed that an account should be taken of it with a view to ascertaining the amount due to the deceased in respect thereof. he also directed that the amount so ascertained should be payable by defendant no. 1 with interest at six per cent. to the plaintiff, it is contended that this.....
Judgment:

Fawcett, J.

1. The plaintiff respondent in this appeal, as the owner and manager of the temple of Shri Balaji at Surat, sued for the administration of the estate left by the deceased Vijubhai Kashidas, who died on March 27, 1920. He made a will in about 1907, under which, after the death of his then wife, Bhikhi, he dedicated his estate to this temple. Subsequently, Bhikhi died and Vijubhai remarried. After his death his second widow, whose posthumous daughter had died, contracted a natra marriage. The plaintiff, accordingly, sued for administration and accounts from the executors of this will defendants Nos. 1 and 2. Defendant No. 2 was a cousin of the deceased, but is held by the Subordinate Judge to be under no liability to account, not having administered the estate. Defendant No. 1 was, on the other hand, held to be liable, and a preliminary decree has been passed against him. He appeals.

2. The first point taken on his behalf is that there has been misjoinder and non-joinder vitiating the suit. This objection arises out of the relief sought by the plaintiff' in regard to a partnership business, in which the deceased was one of the partners, The other two partners were defendant No. 1 and one Ratansi, who was not made a defendant in the suit, although he was alive when it was brought. He has since died. The plaintiff seeks accounts of this partnership business and the Subordinate Judge has directed that an account should be taken of it with a view to ascertaining the amount due to the deceased in respect thereof. He also directed that the amount so ascertained should be payable by defendant No. 1 with interest at six per cent. to the plaintiff, It is contended that this virtually joins a partnership suit on to an administration suit. It is also contended that Ratansi's heirs are necessary parties to the suit. The question of misjoinder can best be first dealt with, because if there is such misjoinder the question of non-joinder does not arise.

3. In defendant No. 1's written statement the only objection on the score of misjoinder is that contained in paragraph 17, where it is said, 'The plaintiff's suit relates to the immoveable property and in it is joined the relief of taking partnership accounts under Rule 4, Order II, of the Civil Procedure Code; such a suit is not maintainable in this form.' Objections were also taken in the written statement that the claim relating to the partnership business was time-barred and that the suit was bad for non-joinder, as Ratansi was a necessary party. Issues were raised in regard to the two latter objections, viz., Nos. 6 and 7, and they have been decided against defendant No. 1. But no issue was raised on this question of misjoinder. In these circumstances, I think that the objection of misjoinder was clearly not pressed, and that under Order II, Rule 7, it must be deemed to have been waived. Even before the enactment of Order II, Rule 7, it was held to be a general rule that, if an objection on the ground of misjoinder of causes were pressed and carried to a decision in the first Court, the High Court would, even upon special appeal, upon its being shown to be well founded, give the objector the benefit of it; but if it was not pressed and carried to a decision in the first Court, and if the parties went to trial as if the objection had not been made, then the objection would not he given effect to at a later stage, unless it appeared clearly that there was a defect in the original trial in consequence of misjoinder : Tarinee Churn Ghose v. Hunsman Jha (1873) 20 W.R. 240. In the present case there was a reason for the ground of misjoinder not being pressed, because it was inconsistent with the objection about the non-joinder of Ratansi; and the pleader of defendant No. 1 may have accordingly confined his objection to one of non-joinder. I do not, therefore, think that the appellant can claim to agitate this objection in appeal. But, in any case, after hearing what Mr. Divatia has urged in support of it, I do not think there is any substance in the objection. He relied upon Order II, Rule 4, Civil Procedure Code, as was done in paragraph 18 of defendant No. 1's written statement. But that rule, in my opinion, clearly does not support the objection, because the case is one where the claim to a relief in regard to the partnership business is based on the same cause of action as that on which is based a claim for the recovery of immoveable property. The basis of the plaintiff's case in both cases is title and refusal to deliver up the property on demand. An administration suit almost necessarily covers both immoveable and moveable property of the estate of the deceased; and the form of a preliminary decree in such a suit, No. 17 in App. D of the Civil Procedure Code, covers both descriptions of property. Even before Clause (a) of this Rule 4 was enacted, it was held under the corresponding Section 44 of the Code of 1882 that leave was entirely unnecessary in an administration in a case of this kind: Nistarini Dassi v. Nundo Lall Bose I.L.R. (1899) Cal. 891. There the case of Pointon v. Pointon (1871) L.R. 12 Eq. 547 is cited and followed.

4. Order II, Rule 5, also does not bar the present suit. Defendant No. 1 is sued in his representative capacity as an executor and if any question of his personal liability, apart from his representative liability, arises, then it is one arising with reference to the estate in respect of which he is sued as executor. In England the rule has been well settled that in an administration suit, there can be an enquiry as to accounts of a partnership, in which the deceased was a partner. The rule is thus stated in Halsbury's Laws of England, Vol. XXII, Article 143, p. 74:- 'The persons beneficially interested in the estate of a deceased partner, whose executor, being also a partner, uses the testator's assets in the business, are entitled to accounts from the executor, but not from the other persons unless they have notice of a breach of trust by the executor.' This applies to the present case, where defendant No. 1 is alleged to have continued the partnership business and used money due to the testator in such business. It is unnecessary to consider the English authorities on which this rule is based. No doubt, the facts in some of them are different to the facts here. But that does not affect the general principle on which the rule I have mentioned is based.

5. On the other hand, it is a rule which is undoubtedly subject to limitations, Reliance was placed by Mr. Divatia on the decision in Bamanji Ardeshir v. Bai Mariam (1919) F.A. No. 164 of 1916, decided by Macleod C.J. and Shah J. on August 13, 1919. (Unrep.), where it was held that in effect a partnership suit had been wrongly joined with an administration suit; but that case was clearly different from the present one, and in the judgment on the application for a review it is expressly stated that 'there may be exceptional circumstances' in which a Court will allow in administration suit partners of a deceased to be joined. In that particular case, there were three separate suits that had been filed for dissolution of the partnership and for taking accounts, and confusion was entailed by having a similar enquiry in the administration suit. The Court in such a case is clearly justified in not allowing the partnership enquiries in the administration suit. This is expressly provided for in Rule 6 of Order II : and the decision seems to be in accordance with what was held by the House of Lords in Vyse v. Foster (1872) 8 Ch. D. 309, where it was held that in the circumstances of that case on an action against the executors, all of whom were not partners, nor were all the partners executors, there could not be a general decree for an account of the profits of the partnership. In the present case the, lower Court has in its finding on issue No. 7 expressly stated that the partnership accounts ought to be examined only for the purpose of ascertaining the loss accrued in consequence of defendant No. 1's default and the party liable to make good this loss is only defendant No. 1. It further appears that balance sheets were annually drawn up showing the amount of profits due to each of the three partners, and the one for the Samvat year 1976 (i.e., A.D. 1920), in which year the deceased died, is in evidence as Exhibit 98. The partnership account books were produced by defendant No. 1 himself, and in his deposition he has stated that he has no objection to pay to whomsever the Court directs whatever may be found due to the estate under the partnership accounts. In the circumstances, it clearly is convenient that this suit should cover an enquiry into what is due to the deceased's estate on account of this partnership business. There is nothing that renders it inconvenient to make such an enquiry, provided it is conducted within proper limits such as will be indicated later on. Therefore I think the objection as to misjoinder entirely fails.

6. Regarding the question of non-joinder the lower Court held that Ratansi was not a necessary party and, in my opinion, that decision is correct. The rule that I have quoted from Halsbury's Laws of England supports this view. The circumstances of the case as I have already mentioned do not necessitate a full partnership account, such as might be necessary in a partnership suit. The decree will not affect any claim that Ratansi's heirs may have in regard to the partnership business and will be confined, firstly, to ascertaining what on the partnership books before us is due from defendant No. 1 as assets that had either come to his hands or to the hands of any other persons by his order or for his use : cf. head (5) of the form of a preliminary decree in Appendix D, No. 17. Secondly, there must be the addition that is indicated by the lower Court's decision on the question of limitation. There it was held that in his character as executor it was defendant No. 1's duty to realize with due diligence all the debts owing to the deceased, and if this duty was neglected until the debts came to be barred by limitation that was default for which defendant No. 1 would be liable to the estate. That view is in accordance with Section 147 of the Probate and Administration Act, 1881, and was not challenged before us. Defendant No. 1 by his plea of limitation himself drew attention to the possibility of there having been negligence on his part, making him liable under this section. Accordingly this enquiry should also include one for any partnership profits that would have come to his hands, but for his devastation, negligence or wilful default. That is an enquiry which can properly be made in a case where there is an allegation of some breach of trust by an executor: cf. Wrightson v. Cooke [1908] 1 Ch. 789. But, for the reasons already given, I think it is clear that the presence of Ratansi's heirs is not necessary in order to enable the Court to effectively and completely adjudicate upon and settle all the questions involved in this suit. I hold, therefore, that this objection also fails. [His Lordship after discussing evidence concluded:]

7. We, therefore, confirm the lower Court's decree, subject to an amendment as to the enquiry No. 3 as to the account of the partnership business, in order to make it clear that it should be confined to what was contemplated by the lower Court. We, therefore, substitute for that item the following :-

An account to be taken of the partnership business in the suit with a view to ascertain the amount due to the deceased in respect thereof that has come to the hands of defendant No. 1, or to the hands of any other person by his order or for his use, or that would have come to his or that other person's hands, but for his devastation, negligence or wilful default.

Patkar, J.

8. [His Lordship after discussing points not material to this report proceeded:] The other point raised in the appeal is that the suit is bad for misjoinder of causes of action. It is urged that the suit with regard to administration of the estate of Vijubhai could not be joined to a claim to take accounts of the partnership carried on by the testator Vijubhai in conjunction with defendant No. 1, the executor, and a stranger, Ratansi Hansji. The point was not specifically taken in the written statement. The only point taken in the written statement was that the relief with regard to taking accounts of partnership could not be joined with the relief with regard to possession of immoveable property under Order II, Rule 4. The specific objection in the form now presented before us cannot be entertained in appeal under Section 99, Civil Procedure Code, Order I, Rule 13 and Order II, Rule 7. But Order II, Rule 5, allows the joinder of a claim against the executor as such with a claim against him personally which is alleged to arise with reference to the estate in respect of which defendant No. 1 is sued as an executor. In Macdonald v. Richardson : Richardson v. Marten (1858) 1 Giff. 81, a suit by a legatee for account of profits since the testator's death against the executor partner alone was allowed without making other persons, whom the executor partner subsequently took into partnership, parties to the suit. See Lindley on Partnership, p. 714. It is the trustee or executor and not his partners who are to make good the amount of profits. The contention of the defendant No. 1 that Ratansi should be made a party to the suit is inconsistent with the point now raised that the relief with regard to taking of partnership accounts should not be joined to the relief with regard to the administration of the estate. In the absence of collusion with the executor or misconduct in refusing to produce the books or to show the account of profits received or receivable by the executor, the other partners are not liable to be joined as parties to a suit against the executor: Macdonald v. Richardson: Richardson v. Marten (1858) 1 Giff. 81. A similar objection on the ground of multifariousness and for want of parties was overruled in Pointon v. Pointon (1871) L.R. 12 Eq. 547. The decision in Bamanji Ardeshir v. Bai Mariam (1919) F.A. No. 164 of 1916, decided by Macleod C.J. and Shah J. on August 13, 1919 (Unrep.), on which Mr. Divatia relied, is explained by the judgment in the review application on the ground that there were three separate suits tiled for dissolution of partnership and for taking accounts and that confusion was likely to ensue by launching a similar inquiry in an administration suit. I think, therefore, that the objection with regard to misjoinder fails.


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