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Gulab Rai Vs. Shibba Mal and anr. - Court Judgment

LegalCrystal Citation
Subject Civil
CourtAllahabad
Decided On
Reported inAIR1937All674
AppellantGulab Rai
RespondentShibba Mal and anr.
Excerpt:
- - but on appeal by the defendants, the lower appellate court held that the contention of the defendants noted above was well founded and accordingly modified the decree of the trial court by granting to the plaintiff a decree only for the dissolution of partnership and by dismissing the plaintiff's claim for accounts. in my judgment this contention is well founded......43 of the act a firm stands dissolved without a suit being filed for the purpose. but whether the firm is dissolved by a decree of court or otherwise, the dissolution can never be complete unless the accounts of the firm are settled. indeed, by section 48 of the act which is in the chapter headed as 'dissolution of a firm', rules for settlement of accounts between partners have been laid down by the legislature.3. in cases in which a firm is dissolved otherwise than by a decree of court, it may be necessary for a partner to have the accounts of the firm settled by means of a suit and it appears to me that the words 'or for accounts of a dissolved firm' in the exception were used by the legislature to make provision for this class of cases. such cases stand on a different footing from.....
Judgment:

Iqbal Ahmad, J.

1. This is a plaintiff's appeal and arises out of a suit for dissolution of partnership and settlement of accounts. The partnership was entered into between the plaintiff and the defendants-respondents on 1st May 1932. The suit was contested by the defendants and one of the pleas urged in defence was that in view of the provisions of Section 69, Partnership Act (Act 9 of 1932), the claim for settlement of accounts was not maintainable. I am not concerned in the present appeal with the other points raised in defence by the defendants. The trial Court overruled the contention of the defendants based on Section 69, Partnership Act, and passed a decree in the plaintiff's favour for dissolution of the partnership and for accounts. But on appeal by the defendants, the lower appellate Court held that the contention of the defendants noted above was well founded and accordingly modified the decree of the trial Court by granting to the plaintiff a decree only for the dissolution of partnership and by dismissing the plaintiff's claim for accounts. The plaintiff has come up in appeal to this Court and it is contended on his behalf that the lower appellate Court has not rightly interpreted Section 69, Partnership Act, and has erred in disallowing the prayer for settlement of accounts. In my judgment this contention is well founded. It is provided by Section 69, Partnership Act, that:

69. No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the register of firms as a partner in the firm.

2. It is further provided by the section that nothing contained therein shall affect

the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realize the property of dissolved firm,

and the decision of this appeal depends on the interpretation of this exception to the general rule enacted by Section 69, Partnership Act. It is common ground that the firm to which the suit related was not registered and the question for consideration in the appeal is whether the plaintiff was entitled to join with the prayer for the dissolution of the firm a prayer for settlement of accounts. It is contended on behalf of the defendants that the exception referred to above permits a suit for accounts by a partner of an unregistered firm only if the partnership was dissolved before the date of the institution of the suit, and that a prayer for accounts cannot be joined with the prayer for the dissolution of an existing firm. I am unable to agree with this contention. There are various modes in which a firm may be dissolved as is manifest by the provisions of Sections 41 to 44 of the Act. It is only in oases provided for by Section 44 that the intervention of the Court is necessary for dissolving a firm, and in cases provided for by Sections 41 to 43 of the Act a firm stands dissolved without a suit being filed for the purpose. But whether the firm is dissolved by a decree of Court or otherwise, the dissolution can never be complete unless the accounts of the firm are settled. Indeed, by Section 48 of the Act which is in the Chapter headed as 'Dissolution of a firm', rules for settlement of accounts between partners have been laid down by the Legislature.

3. In cases in which a firm is dissolved otherwise than by a decree of Court, it may be necessary for a partner to have the accounts of the firm settled by means of a suit and it appears to me that the words 'or for accounts of a dissolved firm' in the exception were used by the Legislature to make provision for this class of cases. Such cases stand on a different footing from cases in which a partner institutes a suit for dissolution of a firm. In this class pi cases the Court, while dissolving the firm, has necessarily to settle the accounts between the partners in order to pass a final decree in the suit, and provision for this class of cases is made by the earlier portion of the Exception which gives the 'right to sue for the dissolution of a firm'. To give effect to the contention of the defendants would be to hold that in case of an unregistered partnership a partner can seek re3ress only by means of two successive suits, one for dissolution of the firm, and the second a suit for settlement of accounts. This would obviously be a very inconvenient course and in the absence of express words to that effect in the Exception, I am not prepared to hold that the Legislature intended that a suit for settlement of accounts must be filed after the suit for dissolution of the firm has been disposed of. I therefore bold that the plaintiff was entitled to a decree not only for dissolution of the firm but also for settlement of accounts. Accordingly I allow this appeal, set aside the decree of the lower appellate Court and restore the decree of the trial Court with costs in all Courts.

4. N.B.-Leave to appeal under the Letters Patent is granted.


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