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Daitari Mohapatra Vs. Brundaban Matia - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 15 of 1955
Judge
Reported inAIR1959Ori110
ActsCode of Civil Procedure (CPC) , 1908 - Order 41, Rule 26; Partnership Act, 1932 - Sections 69 and 69(3)
AppellantDaitari Mohapatra
RespondentBrundaban Matia
Appellant AdvocateB.K. Pal and ;J. Brahma, Advs.
Respondent AdvocateK.M. Swain, Adv.
DispositionAppeal dismissed
Cases ReferredRajgopal Chettiar v. Palani Chettiar
Excerpt:
.....in the plaint that the agreement between the partners was that the plaintiif should maintain the accounts of the firm. hence, when the pleadings of the parties are carefully scrutinised i am satisfied that the suit was in substance a suit by one of the partner for a decree for the balance of the sum due to him from the other partner as per the accounts of the firm as maintained by him. if, therefore, the partner of a dissolved firm considers that a certain sum of money is due to him from the other partner after final .settlement of accounts he can clearly take advantage of the exception contained in clause (a) of sub-section (3) of section 69 even though the firm was not a registered one. it being admitted therefore that the partnership was dissolved before the date of the suit and it..........were required to be maintained by the defendant, the plaintiffs remedy would be by way of a suit for accounts and for a decree for any balance of money that may be due to him. but it was clearly alleged in the plaint that the agreement between the partners was that the plaintiif should maintain the accounts of the firm.consequently, when the partnership is, dissolved by the operation of law and the plaintiff considers that a certain sum of money is due to him from the defendant, ho cannot bring a suit for accounts but can only bring a suit claiming the amount due to him. on the basis of the accounts of the firm as maintained by him. if the plaint is read carefully, it will be found, in substance, to be a suit of that type.there is doubtless no specific prater for the taking of.....
Judgment:

R.L. Narasimham, C.J.

1. This is a defendant's second appeal against the appellate judgment of the District Judge of Cuttack reversing the judgment of the III Additional Munsif Cuttack and decreeing the plaintiff's suit for recovery of a certain sum of money from the defendant.

2. The plaintiff alleged that there was a partnership between him and the defendant for the purpose of doing repair work to Khaira bridge in 1944 and that the wirk was completed in due course, on the 5th June 1944. The execution of the repair work was entrusted to the defendant and the plain-tiff's function as a partner was to contribute certain sums of money and also to maintain accounts.

The plaintiff further alleged that though the work was completed on the 5th June 1944 the defendant evaded paying the net sum due to him on some pretext or other. He therefore brought the present suit, claiming a sum of Rs. 689-9-6. A schedule was attached to the plaint giving a complete statement of the accounts of the partnership usiness showing the aforesaid sum of Rs. 689-9-6 as due to the plaintiff. The defendant raised all sorts of pleas which need not be discussed in detail at present.

The learned Munsif who tried the suit in the first instance agreed with the plaintiff's claim in respect of all the essential points and decreed the suit for Rs. 611-7-3, An appeal against his decision was first heard by Sri A. R. Guru the then Additional District Judge of Cuttack who, while affirming the finding of the learned Munsif on all the essential facts of the case, remanded the suit for re-hearing after framing a new issue which was to the following effect:

'Is the firm a registered one and is the suit maintainable in view of the provisions of Section 69 of the Partnership Act?'

After remand the suit was heard by the 3rd Additional Munsif Cuttack and he held that as the partnership was not registered, the suit was not maintainable in view of the bar imposed by Section 69(1) of the Partnership Act; and hence he dismissed the suit. An appeal was taken before the District Judge (M. A. No. 123 of 1949) who relying on Sheo Dutt v. Pushi Ram, AIR 1947 All 229 held that the suit was maintainable as it would come within the scope of Clause (a) of Sub-section(3) of Section 69 of the Partnership Act.

As regards the other questions, he thought that in view of the previous decision of the Additional District Judge affirming the findings of the trial court it was not open to him to re-examine those questions. Hence he decreed the suit in terms of the decree passed by the learned Munsil in the first instance.

3. In this second appeal two points of law were canvassed:

(i) The lower appellate court which heard the appeal after remand should not have felt itself bound by the findings of the lower appellate court prior to the order of remand and that it should have re-examined the entire case and come to its own independent findings on the facts.

(ii) In any case the lower appellate court committed an error of law in holding that the suit came within the exception contained in Clause (a) of Section 69 of the Partnership Act and that it is barred by Sub-section (1) of Section 69 as admittedly the partnership was registered.

4. So far as the first point is concerned, the learned Advocate for the appellant relied on Mst. Chauli v. Mrs. Meghoo, AIR 1945 All 268 (FB), but I do not think that that decision will help him very much. There their Lordships held that if special reasons existed as to why the previous decisions of the appellate court before remand on the merits of the case should be reconsidered, the appellate court which may hear the appeal after remand need not feel itself bound by that decision and may re-examine the question and take a different view.

It has not been shown to us that any special reasons existed in the present case as to why the findings of Mr. Guru affirming the findings of fact of the original trial court should be re-considered. Under such circumstances, if the lower appellate court thought that it was bound by the finings ofMr. Guru I do not think it can be said that hehas committed an illegality.

5. The second question requires careful consideration. It is an unchallenged fact that the partnership was not registered under the provisions of the Indian Partnership Act. Sub-section (I) of Section 69 of that Act bars a suit to enlorce any right arising from a contract by a person suing as a partner of a firm against another alleged to be a partner of that firm, unless the firm is a registered one. But Clause (a) of Sub-section (3) of Section 69 is an exception to this bar, and it may be quoted:--

'The provisions of Sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect--(a) the enforcement of any right to sue for the dissolution of a firm, or for accounts of dissolved firm, or any right or power to realise the property of a dissolved firm.'

It is conceded that, by virtue of Section 42(b) of the Partnership Act the partnership was dissolved on the completion of the undertaking on the 5th June 1944. ' Doubtless, if under the terms of the agreement between the partners the accounts were required to be maintained by the defendant, the plaintiffs remedy would be by way of a suit for accounts and for a decree for any balance of money that may be due to him. But it was clearly alleged in the plaint that the agreement between the partners was that the plaintiif should maintain the accounts of the firm.

Consequently, when the partnership is, dissolved by the operation of law and the plaintiff considers that a certain sum of money is due to him from the defendant, ho cannot bring a suit for accounts but can only bring a suit claiming the amount due to him. on the basis of the accounts of the firm as maintained by him. If the plaint is read carefully, it will be found, in substance, to be a suit of that type.

There is doubtless no specific prater for the taking of accounts between partners and for a decrea for the sum that may be due to the plaintiff after the taking of such accounts. But the plaintiff having first stated that it was his business to keep the accounts of the firm, further stated that the defendant evaded settlement of accounts under some pretext or other and that the accounts, when fully scrutinised, would show that a sum of money was due to the plaintiff from the defendants. The details of the accounts were given in the schedule attached to the plaint.

There is nothing in the plaint to show that the accounts were not complete and that they were in respect of a few items only. The defendant also did not take any such plea but he denied the partnership altogether. Hence, when the pleadings of the parties are carefully scrutinised I am satisfied that the suit was in substance a suit by one of the partner for a decree for the balance of the sum due to him from the other partner as per the accounts of the firm as maintained by him. in which all the assets and liabilities of the two partners in respect of the partnership were fully disclosed.

6. Clause (a) of Sub-section (3) of section 69 of the Partnership Act refers to three clashes of suits; (i) a suit for dissolution of a firm, fii) a suit for accounts of the dissolved firm and (iii) a suit to enforce any right or power to realise the pro-pertv of a dissolved firm, (i) and (ii) cannot apply in this case for the reasons already given. There is no reason why (iii) should not apply.

The word 'Property' would ordinarily include I both moveable and immovable property and would,therefore, include money also. If, therefore, the partner of a dissolved firm considers that a certain sum of money is due to him from the other partner after final .settlement of accounts he can clearly take advantage of the exception contained in Clause (a) of Sub-section (3) of section 69 even though the firm was not a registered one.

7. In my opinion the learned lower court rightly relied on AIR 1947 All 229 though on facts it is slightly different from the present case. There it was held that the word 'property' in clause (a) of Sub-section (3) ot Section 69 of the Partnership Act, must include a claim for money also. I may quote the following passage:

'It being admitted therefore that the partnership was dissolved before the date of the suit and it being the plaintilt's case that the sums claimed by the plaintiff were due from the defendant, Pusi Ram, to the partnership, the suit to Our mind was clearly maintainable.'

Doubtless in that case the plaintiff alleged that after the dissolution of the firm there was private settlement of accounts between the parties on the basis of which a certain sum was due to the plaintiif. Their Lordships, however, did not believe his evidence regarding the private settlement of accounts and remanded the case to the lower court for settlement of accounts and for a decision as to how much was due to the plaintiff.

In the instant case, however, the plaintiff did not allege that there was a private settlement of accounts of the dissolved firm, but as he was the person responsible for maintenance of accounts he gave an account and claimed a certain sum as due to him from the defendant. The courts of fact accepted his statement of accounts as correct and held that the sum claimed was in fact clue to him from the defendant. The necessity for a remand does not therefore arise. In other respects this case is practically very similar to the Allahabad case and the principles laid down therein would apply with equal force.

8. Doubtless the position would be different if the claim of the plaintiff from the defendant was not in respect of the balance due after the entire accounts of the partnership between the parties had been finally adjusted but was in respect of one or two items of money given by him. In such a case the principles laid down in K, Gopal Chetty v. L. G. Vijayaraghavachariar, AIR 1922 PC 115, which were followed in Rajgopal Chettiar v. Palani Chettiar, AIR 1954 Mad 1101 (FB) would apply and suit by a partner for the recovery of a sum of money which would represent only an item in the partnership accounts, will not be maintainable without a suit for general accounts. But as pointed out already, if the pleadings are reasonably construed, the suit is, in essence, a suit for recovery of some money due to the plaintiff on final settlement of accounts of the partnership business between him and the defendant.

9. In my opinion, therefore, the non-registration of the firm under the Partnership Act will not operate as a bar to the maintainability of the suit in view of Clause (a) of Sub-section (3) of section 69 of that Act. The lower appellate court's view on this point was therefore correct.

10. The appeal is dismissed with costs.

G.C. Das, J.

11. I agree.


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