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Udhavji Anandji Ladha and ors. Vs. Bapudas Ramdas Darbar - Court Judgment

LegalCrystal Citation
SubjectContract;Limitation
CourtMumbai
Decided On
Case NumberFirst Appeal No. 137 of 1946
Judge
Reported inAIR1950Bom94
ActsLimitation Act 1908, - Sections 4 to 25; Hindu Law; Partnership Act 1932, - Sections 37; Code of Civil Procedure (CPC) , 1908 - Sections 34
AppellantUdhavji Anandji Ladha and ors.
RespondentBapudas Ramdas Darbar
Appellant AdvocateK.G. Datar, Adv.
Respondent AdvocateC.K. Daphtary, Adv. General, ;G.R. Madbhavi and ;K.R. Bengeri, Advs. for Respondent No. 1.
DispositionAppeal dismissed
Excerpt:
contract - acknowledgment - sections 4 to 25 of limitation act, 1908, hindu law, section 37 of partnership act, 1932 and section 34 of code of civil procedure, 1908 - suit for dissolution of partnership of firm and accounts - defendants contested suit on ground of limitation - plaintiff rely upon acknowledgment - held, under section 19 acknowledgment valid and fresh limitation period starts. - - therefore, it is clear that an acknowledgment starts a fresh period of limitation, and the one condition that has got to be satisfied is that the acknowledgment must be made before the prescribed period of limitation has expired. then came the khata which was passed on 4th january 1918, which was after a period of three years, and, therefore, that khata could not be a proper acknowledgment.....chagla, c.j.1. this is an appeal from a decree passed by the joint civil judge, senior division, belgaum, in a partnership action, and the facts leading up to this litigation may be briefly stated.2. a partnership was started between the plaintiff's father and defendant 1 in 1904 and the plaintiff's father died on 30th april 1927. the plaintiff filed the suit from which this appeal arises for dissolution of partnership and for accounts alleging that even after the death of his father the partnership continued. on 23rd august 1935, the plaintiff applied for amending the plaint for alleging an alternative cause of action, and the alternative cause of action was that in the event of its being held that there was no subsisting partnership after the death of the plaintiff's father, accounts.....
Judgment:

Chagla, C.J.

1. This is an appeal from a decree passed by the Joint Civil Judge, Senior Division, Belgaum, in a partnership action, and the facts leading up to this litigation may be briefly stated.

2. A partnership was started between the plaintiff's father and defendant 1 in 1904 and the plaintiff's father died on 30th April 1927. The plaintiff filed the suit from which this appeal arises for dissolution of partnership and for accounts alleging that even after the death of his father the partnership continued. On 23rd August 1935, the plaintiff applied for amending the plaint for alleging an alternative cause of action, and the alternative cause of action was that in the event of its being held that there was no subsisting partnership after the death of the plaintiff's father, accounts should be taken on the footing that the partnership stood dissolved on the death of the plaintiff's father. That application was rejected by the trial Court, and the trial Court holding that there was no subsisting partnership after the death of the plaintiff's father, dismissed the plaintiff's suit. An appeal was preferred to this Court, being First Appeal No. 164 of 1938. This Court took the view that the Court below was in error in not granting the amendment. It took the same view as the trial Court with regard to the original cause of action, pleaded by the defendants. But Divatia J, in delivering the judgment of the Court thought that it was open to the plaintiff at its inception to plead an alternative cause of action which was inconsistent with the first cause of action, and if that were possible, there was no reason why an amendment should not be permitted to plead an inconsistent cause of action at a subsequent stage of the suit. It was then urged upon Divatia J. that the question of limitation would have to be considered. Divatia J. realised the force of that argument, but he ob served that it was not possible for the Court to go into the question of limitation and therefore, as I read the judgment, Divatia J. was under the impression that the trial Court would go into the question as to whether the plaintiff's cause of action would have been barred at the date the amendment was applied for, namely, 23rd August 1935; and after considering that and if it was not so barred, the amendment should be allowed. But Divatia J. then went on actually to make the order allowing the amendment but made this order conditional upon the question of limitation being considered by the Court below. Now, when the matter went back to the trial Court, both the parties proceeded on the assumption that the amendment had already been made. The defendants contended that the amendment could not relate back to the filing of the suit and therefore, limitation should be considered as from the date of the amendment. The plaintiff contended that the amendment did relate back to the date of the filing of the suit, and if the suit was not barred, the alternative cause of action asked for would also be in time. The learned Judge took the view that it did relate back to the date of the filing of the suit, that the suit was in time and that, therefore, no question of limitation arose. Now, Mr. Datar before us has very fairly conceded that it is not open to him to argue that the amendment could not relate back to the filing of the suit, and what he has urged and urged very strenuously is that the proper effect to be given to the judgment of the High Court is that we must consider whether the cause of action was barred on 23rd August 1935, when the application for amendment was made, and if we come to that conclusion we should hold that the learned Judge was in error in allowing the amendment, Unfortunately it is too late in the day to put forward this argument. This argument was in fact not presented to the Court below; but as I have already said, parties proceeded on the assumption that the order for amendment was made and Divatia J.'s own judgment does indicate as if the High Court had made the order. Therefore, in our opinion, it is not open to Mr. Datar now to contend that the order for amendment should not have been made till it was ascertained whether the cause of action would have been barred or not on 23rd August 1935. The argument loses some of its importance because in our opinion, as I shall presently point out, even if Mr. Datar's argument is accepted, as a matter of fact the cause of action of the plain-tiff was within time even on 23rd August 1935.

3. Now, the main point that has been argued in this appeal is the question of limitation. If this is a suit for accounts of a dissolved partnership, the suit would be barred within three years of the death of the plaintiff's father and that would be 30th April 1930. Now, it is important to note in this connection that the plaintiff was born on 13th December 1910 and therefore he attained majority on 13th December 1928. Therefore when the cause of action accrued, the plaintiff was a minor, and under Section 6, Limitation Act he would be entitled to file a suit within three years of his attaining majority. That would be on 13th December 1931. The suit has been field on 27th September 1933. Therefore, prima facie the suit is out of time. Now, in order to save limitation, the plaintiff has relied on various acknowledgments. These are Exs. 58 to 63 and the dates respectively are 7th January 1928, 25th August 1931, 8th December 1931, 8th August 1932, 25th August 1932, and 22nd July 1933.

4. The material acknowledgment which we have to consider is the acknowledgment of 8th December 1931, Ex. 60, because if that is a valid acknowledgment, it is not disputed that the suit filed on 27th September 1933, would be within time. It will be noticed that this acknowledgment has been passed within three years of the date on which the plaintiff attained majority, namely, 13th December 1928. It is not disputed that this particular document does constitute an acknowledgment of liability. The objection that is raised to it is that it cannot constitute an acknowledgment within the meaning of Section 19, Limitation Act and cannot start a fresh period of limitation. Now, the argument advanced by Mr. Datar briefly put is this. Mr. Datar says that under Section 19, Limitation Act an acknowledgment must be made within the period prescribed for a suit under the schedule to the Limitation Act. If an acknowledgment is made within the extended period given by Section 6, Limitation Act, then such an acknowledgment is not an acknowledgment within the meaning of Section 19 and it cannot start a fresh period of limitation; and, therefore, Mr. Datar contends that on the plaintiff attaining majority on 13th December 1928, by reason of Section 6 he could file a suit within three years thereafter, but that was not the period of limitation prescribed by the Indian Limitation Act. The period of limitation prescribed was three years from 13th April 1927, and the further period of limitation was an extended period given to the plaintiff by reason of Section 6, Limitation Act, and as the acknowledgment was passed not within the prescribed period of limitation but within the extended period, the plaintiff cannot avail himself of this acknowledgment and the suit is out of time.

5. In order to understand and appreciate this argument, it is necessary to look at the scheme of the Limitation Act. Fart II, Limitation Act deals with limitation of suits, appeals and applications; and Section 3 provides that subject to the provisions contained in Section 4 to 25 (inclusive), every suit instituted after the period of limitation prescribed therefor by the first schedule shall be dismissed. Now turning to the first schedule, it contains three columns: col. 1 deals with the description of suit, col. 2 lays down the period of limitation, and col. 8 indicates the time from which the period of limitation is to run; and, therefore, by reason of Section 3, if a suit is filed after the period of limitation prescribed in col. 2 has expired, that suit shall be dismissed. But it is important to note that Section 3 specifically provides for the provisions contained in Sections 4 to 25. Therefore, it is fallacious to contend that a suit is liable to be dismissed merely by looking at the first schedule and satisfying oneself that the period of limitation therein set out has expired. The scheme of the Limitation Act is to determine the period of limitation not merely by looking at the first schedule but by looking at the first schedule in conjunction with Sections 4 to 25 which also deal with limitations of suits, appeals and applications. Then we come to Section 6 with which we are concerned and that deals with legal disability. That section provides that where a person entitled to institute a suit -- I am dealing with the material part of the section -- is, at the time from which the period of limitation is to be reckoned, a minor, he may institute the suit within the same period after the disability has ceased, as would otherwise have been allowed from the time prescribed therefor in the third column of Schedule 1. Now, this section can only apply to those persons who suffer from a legal disability at the time when they are entitled to institute a suit, and the concession made to them by the Legislature is that they are entitled to file a suit within the same period after the disability has ceased as they would otherwise have been entitled to file from the time prescribed in the third column of Schedule 1. Therefore, in their case as it were time begins to run from the cessation of their disability and the period of limitation is the same as provided in the second column of Schedule 1; but with this reservation that by reason of Section 8 the period of limitation after the cessation of their disability is not to be more than three years. Then Section 9 enunciates a very important principle of the law of limitation and that is that where once time has begun to run, no subsequent disability or inability to sue stops it. Therefore, an intervening disability cannot be availed of under Section 6, Limitation Act. It is only when the legal disability is at its inception at the time when a person becomes entitled to file a suit that he can avail himself of the provisions of Section 6. But if a person is under no legal disability when the right to sue accrues to him and then a legal disability intervenes, he cannot avail himself of the special concession made by Section 6, Limitation Act.

6. Then we come to Section 19, Limitation Act and that deals with acknowledgments and provides that where, before the expiration of the period prescribed for a suit in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. Therefore, it is clear that an acknowledgment starts a fresh period of limitation, and the one condition that has got to be satisfied is that the acknowledgment must be made before the prescribed period of limitation has expired. Now the whole controversy centres on this: whether it could be said in the case of a minor who is entitled to file a suit after his legal disability has ceased that the period of limitation had already expired and he was filing a suit by virtue of some special concession made under Section 6, Limitation Act although the period of limitation had expired. Mr. Datar contends that Section 19 must be read to mean that an acknowledgment can only be validly made provided it is made within the period of limitation prescribed in Schedule 1. Now, I see no warrant to read the section in the manner suggested by Mr. Datar. The section itself does not refer to the schedule and, as I have pointed out, when one turns to Section 3, the period of limitation for suits is not that which is prescribed in Schedule 1, but it is that which is prescribed in Schedule 1 read with Sections 4 to 25, Limitation Act; and, therefore, when we look at Schedule 1 and read it along with Section 6, the period of limitation: prescribed for a suit by a minor is not the period mentioned in Schedule 1, but a special period as mentioned in Section 6 of the Act. Therefore, in the case of a minor it cannot be said that the period prescribed for a suit has expired till the period of limitation laid down in Section 6 has elapsed. Therefore, in this case when the acknowledgment was given on 8th December 1931, the period of limitation within which the plaintiff could have filed the suit had not expired because he had attained majority on 13th December 1928, and he could have filed a suit under Section 6, Limitation Act, till 13th December 1931.

7. Now I will briefly refer to the authorities that have been cited at the bar on this point, and considerable reliance is placed upon a decision of a divisional bench of this Court, and Mr. Datar says that that bench has taken a contrary view to the one we are suggesting to be the correct view of the law and that decision is binding on us. Undoubtedly, if a divisional bench decides a question of law, it is binding on subsequent benches unles it is possible to distinguish the decision on the facts of that particular case. I will presently refer to that decision, and in my opinion the part of that decision on which Mr. Datar relies is only, with respect, obiter which it was unnecessary to decide, because the Court could have decided that case on a much narrower and simpler point. This case is reported in Maganlal v. Amichand 30 Bom. L. R. 738 : A. I. R. 1928 Bom. 319. In that case the defendant borrowed a certain sum from the father of the plaintiff in 1898. The plaintiff's father died in 1904, leaving him surviving two minors. On 20th October 1914, the defendant passed a khata to the minors; and passed another one on 4th January 1918. Maganlal, one of the two minors, attained majority on 26th July 1916. Another khata was passed on 28th December 1920, and the suit was filed on 22nd December 1923, and the khata which was relied upon as an acknowledgment was the khata of 28th December 1920. Patkar and Baker JJ. held that the acknowledgment was given after the expiration of the period of limitation and that the suit was barred. Now, the reasoning of the learned Judges was that, according to Section 19, the acknowledgment of liability must be made before the expiration of the period prescribed therefor in Schedule 1 and not before the expiration of the period within which the suit must be brought. Therefore, an attempt was made to distinguish between the period of limitation and the right to file a suit, and this distinction was attempted to be pursued by pointing out that under Section 6 a minor is given a right to file a suit but the period of limitation has already expired under Schedule 1, Limitation Act. Now, with very great respect, this distinction is not borne out either by the scheme of the Limitation Act or by the language of Section 6 and Section 19. It is true that Section 6 does speak of a minor instituting a suit but it states that he may institute a suit within the same period after the disability has ceased as would otherwise have been allowed from the time prescribed therefor in Col. 3 of Schedule 1. Therefore, Section 6 really substitutes in the case of a personal disability a different time from which limitation begins to run to the one that is prescribed in Schedule 1. And again, with respect, the learned Judges have not attached any importance to the language of Section 3, Limitation Act to which I have already drawn attention. The fallacy underlying the argument which has been accepted by the Court in that case is that the period of limitation is prescribed under the Limitation Act only under Schedule 1 irrespective of what Sections 4 to 25 might provide. But even though we might consider, again speaking with very great respect, the view of this bench to be erroneous, we would be bound to follow it but for the fact that this case could have been simply decided on the narrow point that the cause of action accrued to the plaintiff's father when the money was lent by him in 1898, and as limitation would have begun to run against him from the date when the loan was made, namely 1898, under Section 9 the running of time could not have been stopped. Therefore, the fact that on his death he left minors who were under legal disability had no bearing whatever on the question of limitation. Up to 20th October 1914, in that case the khatas passed were within three years of each other and, therefore, they had started a new period of limitation under Section 19, Limitation Act. Then came the khata which was passed on 4th January 1918, which was after a period of three years, and, therefore, that khata could not be a proper acknowledgment within the meaning of Section 19, it having been given after the expiration of the period of limitation, and, therefore the suit was clearly barred by limitation. The question as to what was the effect of this khata being given after the plaintiff had attained majority did not arise for decision at all, because Section 6 had no application as the cause of action accrued not to a person under disability but it accrued to a person who was under no disability and who could have filed a suit on his own cause of action.

8. Mr. Datar very ingeniously says that this decision refers to a Madras case, Venkataramayyar v. Kothandaramayyar, 13 Mad. 135 where it has been held that when an acknowledgment is given when the plaintiff was a minor, it starts a fresh period of limitation and the minor is entitled to avail himself of Section 6, Limitation Act and file a suit three years after attaining majority, and, says Mr. Datar, that as the Divisional Bench accepted the Madras decision as good law, they could not have held that the suit was barred by reason of Section 9, Limitation Act. A fresh cause of action accrued to the minor when an acknowledgment was passed on 20th October 1914, and, therefore, the minor was entitled to sue three years after the disability had ceased and, therefore, it became necessary to consider what was the effect of the acknowledgment of 4th January 1918, as it was given when the minor had attained majority and was no longer under a disability; and therefore Mr. Datar says that the decision is binding on us as it was given by a divisional bench. Now, turning to this Madras case Venkataramayyar v. Kothandaramayyar: (13 Mad. 135), with respect to the learned Judges who decided that case, they have attached no proper importance at all to Section 9, Limitation Act. In that case the plaintiff sued on a registered bond executed to his late father on 20th June 1870. The plaintiff's father died in 1875, leaving the plaintiff a minor and therefore the suit would have been barred on 20th June 1876, but the defendants made acknowledgments of their liability in 1876 and 1877 and the suit was filed in 1887. The plaintiff attained majority in 1885 and what the Court held was that as acknowledgments were given when the plaintiff was a minor, and entirely new period of limitation started from the date of the acknowledgment and the plaintiff was entitled to avail himself of the provisions of Section 6, Limitation Act as he was a minor when this new period of limitation started and he was entitled to file a suit three years after he attained majority. It is perfectly true that an acknowledgment under Section 19, Limitation Act does start a fresh period of limitation; but this is a fresh period of limitation in relation to the period which is already running which has not expired and before the expiration of which the acknowledgment is given. But this fresh period of limitation does not mean that by reason of it the plaintiff becomes entitled to file a suit and that any cause of action accrues to him. The cause of action is already there. His right to file a suit is already there and before the period of limitation expires which would have precluded him from filing a suit or enforcing his cause of action, an acknowledgment is given which starts a fresh period of limitation. Therefore, it is difficult to understand how Section 6, Limitation Act can apply where the person entitled to file a suit was not under a disability. As I have pointed out in the Madras case (Venkataramayyar v. Kothandaramayyar: (13 Mad. 135)), the right to file a suit was with the father. The cause of action had accrued to the father and it is impossible to accept the position that merely because an acknowledgment was given within the period of limitation, it conferred a new cause of action upon the minor which entitled him to avail himself of the concession of Section 6, Limitation Act. In our opinion, Venkataramayyar v. Kothandaramayyar, (13 Mad. 135) was not correctly decided and it does not represent the correct law as to the effect of an acknowledgment given to a minor where the cause of action had accrued already and the right to institute a suit had already arisen. If Patkar and Baker JJ. in Maganlal v. Amichand 30 Bom. L. R. 733: A. I. R. 1928 Bom. 319 had followed Venkataramayyar v. Kothandaramayyar, 13 Mad. 135 after carefully considering it, I agree with Mr. Datar that the law laid down by that decision would really have been incorporated in Maganlal v. Amichand 30 Bom. L. R. 733: A. I. R. 1928 Bom. 319. But we do not find in the judgment either of Patkar J. or Baker J. any consideration of the decision in Venkataramayyar's case, (13 Mad. 135) at all. They accepted it as correct law and proceeded to decide the other question which, according to us, was erroneously decided. I should like to refer to another Bombay case before I turn to the decisions of other High Courts, and that is a recent decision reported in Shantaram Shankar v. Chintamanrao Bhalchandra 44 Bom. L. R. 522: A. I. R. 1942 Bom. 248. Macklin J. has taken the same view as the Madras High Court, and he has held that where the plaintiff is a minor, not at the date of the original cause of action but at the date of the acknowledgment made subsequently by the defendant, he can, under the combined operation of Sections 6 and 19, Limitation Act 1908, institute a suit within the prescribed period of limitation after his disability as minor has ceased. In our opinion this case also has not been correctly decided. With respect to the learned Judge, he also has not attached the same importance to the provisions of Section 9, Limitation Act as he should have done.

9. Now in deciding Maganlal v. Amichand 30 Bom. L. R. 733: A. I. R. 1928 Bom. 319 the learned Judges thought that they were following an earlier decision of this Court reported in Bai Hemkore v. Masamalli 26 Bom. 782: 4 Bom. L. R. 608. That was a judgment of Sir Lawrence Jenkins, C.J., and it really turned on the construction of Section 5, Limitation Act which corresponds now to Section 4. In that case an acknowledgment was passed after the period of limitation had expired, but it was passed on a date when the Court being closed the plaintiff could not file the suit and under Section 4 a right was given to him to file the suit on the next day when the Court re-opened. The argument that was submitted to the bench there was that inasmuch as under Section 4, Limitation Act the plaintiff had a right to institute the suit, the cause of action was still subsisting when the acknowledgment was given, and therefore, it was contended that under Section 19 a fresh period of limitation began. But as pointed out by the learned Chief Justice, the suit could have been instituted not because the period of limitation prescribed for the suit had not expired, but because notwithstanding the expiration of that period, a special right under the provisions of Section 4 was given to the plaintiff to institute the suit on the day on which the Court re-opened, and this view of our Court has been accepted and emphasized by the Privy Council in Maqbul Ahmad v. Onkar Pratap Narain Singh to which I shall now refer. In that case their Lordships of the Privy Council pointed out that Section 4 merely provided that if the prescribed time for a civil proceeding expired when the Court was closed, it could be commenced on the day when the Court re-opened, the section did not alter the period prescribed for the proceeding. But under Section 14 and similar sections, certain periods were to be excluded in computing the prescribed period; the effect was that any days so excluded had to be added to what was primarily the prescribed period. Their Lordships of the Privy Council were considering Section 14, Limitation Act, but in our opinion those observations would also apply to other sections of the Limitation Act which have altered the period of limitation, and one of those sections is undoubtedly Section 6.

10. Now turning to the other High Courts, in the first place, Sheo Pratap Singh v. Tajammul Husain : AIR1927All114 decided that the 'period prescribed for the suit', as that expression was used in Section 19, Limitation Act, 1908, was not limited strictly to the period prescribed by Schedule I. There they were considering Section 18 of the Act which gave to a mortgagee an extra period of limitation, and they also held that an acknowledgment of the mortgage debt which was otherwise valid would not be the less so if it were given after the period prescribed by Article 132, provided that it was within the additional period allowed by Section 31, and in the judgment they have correctly distinguished the decision reported in Bai Hemkore v. Masamalli 26 Bom. 782 : 4 Bom. L. R. 608. They point out that Section 4 does not lay down any special period of limitation for any kind of suit. They also refused to limit the meaning of the words used in Section 19, Limitation Act 'before the expiration of the period prescribed.' They say that a period for a suit can be prescribed by a section of the Act as well as by an article of the schedule.

11. Then in Seshayya v. Subbadu 54 Mad. 445 : A.I.R. 1930 Mad. 991 the High Court there took the same view with regard to an acknowledgment made during the extended period given by Section 31 of the Act. Then again in Sambayya v. Subbayya I.L.R. (1938) Mad. 439 : A.I.R. 1938 Mad. 19, certain time had to be excluded which had been taken up in prosecuting proceedings in a wrong Court, and the Madras High Court held that the word 'prescribed' in Section 19, Limitation Act was not limited to the period mentioned in the first schedule of the Act, in computing the period prescribed, the period which a party is entitled to exclude under any law for the time being in force should be taken into account. Therefore, the period a party is entitled to exclude is to be added to the period prescribed in the first schedule, and if an acknowledgment is made within that period, the acknowledgment would be a valid acknowledgment under Section 18.

12. The Lahore High Court in Kishan Singh v. Sardar Ali A. I. R. (24) 1937 Lah. 16.2 : 164 I. C. 650 has gone further than the other High Courts, because that High Court has taken the view that an acknowledgment would be a good acknowledgment even if made within the period prescribed by the schedule read with Section 4, Limitation Act. As I have pointed out already, our High Court has taken a different view in the case reported in Bai Hemkore v. Masamalli : 26 Bom. 782 : 4 Bom. L. R. 608.

13. Therefore, in our opinion, the acknowledgment dated 8th December 1931, was a valid acknowledgment under Section 19, Limitation Act, that it started a fresh period of limitation and therefore the suit which was filed on 27th September 1983, was within time. I should also like to consider a subsequent acknowledgment, Ex. 62, which is dated 25th August 1932. It is suggested by Mr. Datar that this particular document does not acknowledge any liability. It is written by the defendant to the plaintiff and it tells the plaintiff that the plaintiff owes the defendant a large sum of amount; and then it goes on to say that there are certain previous accounts and after the previous accounts were looked into, if the plaintiff still wanted money, he could be given the same. Now this letter in our opinion clearly admits that there are subsisting accounts between the parties, and once an admission is made of subsisting accounts, there is a clear acknowledgment of liability to render accounts and to pay whatever i.e., due. It is perfectly true that this letter does not contain any promise to pay the amount that might be due on the taking of accounts, but an acknowledgment of liability is different from a promise to pay. There might be an acknowledgment of liability under Section 19, Limitation Act, without a promise to pay, and the Privy Council in Maniram v. Seth Rupchand 33 I. A. 165: 33 Cal. 1047 construed the expression 'for the last five years he had open and current accounts with the deceased' as a clear admission of open and current accounts, that either party had a right to an account, and that whoever turned out to be debtor was bound to pay. Therefore, if this is a valid acknowledgment under Section 19--as in our opinion it is--then clearly at the date when the application for amendment was made, namely, 23rd August 1935, any suit that might have been filed on the alternative cause of action would also have been in time.

14. The next contention urged by Mr. Datar is that the learned Judge was in error in passing a decree not only against defendant 1, but also against defendants 2 and 8 to the extent of assets of the joint family come to their hands. Defendants 1, 2 and 3 constituted a joint and undivided Hindu family during all material times. There is nothing in Hindu law to prevent a member of a joint family becoming a partner with a stranger. Whether a karta becomes a partner in his own right and incurs liabilities only personally or whether a joint family becomes a partner is always a question of fact and must be decided on the circumstances of each case. Now, in this particular case the learned Judge has drawn attention to the evidence on record which clearly goes to show that the partner of the plaintiff's father was not defendant 1, but the joint family of which he was the karta. The name of the joint family firm was Anandji Shekhi Ladha and the joint family firm did business similar to the partnership business, and defendant 1, in his evidence stated that after the death of the plaintiff's father his family owned a factory, namely, the Laxmi Cotton Ginning and Pressing Factory, which was the factory worked by the partnership in suit. Then the learned Judge also points out that in a letter dated 5th May 1914, the plaintiff's father wrote to defendant 1, suggesting a signboard in which the names of the proprietors appeared as Shet Anandji Shekhi Ladha and Shet Ramdas Vithaldas Darbar which was the name of the plaintiff's father, and this suggestion was accepted by defendant 1. This shows that the partner was not defendant 1, but the joint family firm of Anandji Shekhi Ladha. Therefore, we see no reason to interfere with the finding of the learned Judge that the partnership consisted of the plaintiff and the joint family firm of Anandji Sheikhi Ladha.

15. The next contention urged by Mr. Datar is with regard to the interest allowed by the learned Judge. What the learned Judge has done is this. He finds that a sum of Rs. 21,500, is the amount which comes to the share of the profits payable to the plaintiff's father which remained unpaid at the time of his death. He also values the assets of the firm at Rs. 98,579 and therefore the one half share coming to the plaintiff was at Rs. 49,289.8.0, and he has allowed interest at 6 per cent. on Rs. 49,289-8-0 and on Rs. 21,500 for six years from the date of the dissolution till the date of the filing of the suit. This interest comes to Rs. 25,380. Now Mr. Datar's grievance is that when the partnership was subsisting, the Partnership Act of 1932 had not come into operation, and the interest that has been allowed by the learned Judge has been under Section 37, Partnership Act, 1982. Now, Section 37 merely embodies a well-recognized principle of partnership law, and that principle is that after the dissolution of a partnership firm a partner has the use of partnership assets or the profits which are attributable to the share of a partner and he must either pay interest or he must pay the profits which have resulted by the use of these moneys. In this case the plaintiff elected to take interest and therefore in allowing interest all that the learned Judge has done is to give effect to a principle which must be accepted independently of Section 37, Partnership Act.

16. Then Mr. Datar has contended that the learned Judge should not have given 6 per cent. rate of interest because that rate was only prescribed after the Partnership Act was passed; but in prescribing that rate of interest the Legislature gave effect to what it thought was the proper rate of interest which a partner should pay when he uses the moneys belonging to the other partner. It is not as if the Legislature arbitrarily fixed the rate of interest at 6 per cent. from 1932 and, therefore, we again see no reason why we should interfere with the rate of interest fixed by the learned Judge.

17. The final contention of Mr. Datar is that although his client might be liable to pay interest from the date of dissolution up to the date of the filing of the suit, he should not be made to pay any interest from the date of the filing of the suit till the amount was ascertained by the decree in suit as to what he was liable to pay. The argument of Mr. Datar is that in a suit for accounts no interest is payable till accounts are taken and amount ascertained. As a general principle this contention is unexceptionable, but in this particular case it has been found as a fact that the defendants had the use of partner, ship moneys and assets and therefore it is impossible to contend that although they should pay interest for these moneys and interest from the date of the dissolution of the partnership till the date of the filing of the suit they should pay no interest whatever from the date of the filing of the suit till the passing of the decree and use these moneys and make profit out of them without paying anything to the other partner whatsoever. The principle to which Mr. Datar refers only applies to those cases where a partner has not the use of the partnership assets and then the interest would only be allowable after the amount is ascertained on the taking of accounts as due by one partner to the other.

18. The final appeal that Mr. Datar has made is that we must reduce the rate of interest from the date of the filing of the suit to 4 per cent. which is at present the recognized rate of interest which the Court allows from the date of the filing of the suit. It is perfectly true that awarding interest from the date of the filing of the suit is discretionary with the Court under Section 34, Civil P. C. but the Advocate General has drawn our attention to the fact that this is a case where a partner had the use of partnership moneys and assets in the same way after the filing of the suit as he had before the filing of the suit and after the dissolution of the partnership, and there is no reason in principle as to why he should pay 6 per cent. interest, for the assets and moneys up to a particular point and pay four per cent. after a certain point of time. It is difficult to answer that argument, and we regret we cannot respond to the appeal made by Mr. Datar.

19. The result is that the decree of the lower Court is confirmed and the appeal dismissed with costs.


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