Skip to content


Sudarsanam Maistri Vs. Narasimhulu Maistei and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Judge
Reported in(1902)ILR25Mad149
AppellantSudarsanam Maistri
RespondentNarasimhulu Maistei and anr.
Cases ReferredWedderburn v. Wedderburn
Excerpt:
hindu law - mitakshara doctrine of joint family property--limitation act--act xv of 1877, schedule ii, article 106--partnership--contract act--act ix of 1872, sections 239, 253. - - 490 of mayne' 3 'hindu law and usage' (6th edition). assuming that the contract business in question was carried on by the joint labour and exertions of plaintiff and first defendant, the present case is, in my opinion, clearly distinguishable from the above case, the fundamental difference being that the business in the above case was carried on by and on behalf of all the members of the joint family, viz. if the joint acquirers intended to hold the property so acquired as co-owners and not as joint family property in the mitakshara sense of that expression, this view would be perfectly sound. but the.....bhashyam ayyangar, j.1. this is an appeal preferred by the plaintiff against the judgment of mr. justice boddam in civil suit no. 159 of 1900, dated 16th january 1901, dismissing the suit with costs. the suit was brought by the plaintiff for taking an account of property alleged to have been jointly acquired by the plaintiff and the first defendant as undivided brothers, for ascertaining the respective shares of plaintiff and first defendant therein and for a decree awarding to him his share in such properties.2. the cause of action, as disclosed in the plaint, is that the plaintiff and the first defendant carried on jointly some contract business until the year 1894, when, disputes and differences having arisen between them, the first defendant and his wife, the second defendant, left.....
Judgment:

Bhashyam Ayyangar, J.

1. This is an appeal preferred by the plaintiff against the judgment of Mr. Justice Boddam in Civil Suit No. 159 of 1900, dated 16th January 1901, dismissing the suit with costs. The suit was brought by the plaintiff for taking an account of property alleged to have been jointly acquired by the plaintiff and the first defendant as undivided brothers, for ascertaining the respective shares of plaintiff and first defendant therein and for a decree awarding to him his share in such properties.

2. The cause of action, as disclosed in the plaint, is that the plaintiff and the first defendant carried on jointly some contract business until the year 1894, when, disputes and differences having arisen between them, the first defendant and his wife, the second defendant, left the house in which they were till then living with the plaintiff, as members of an undivided family, and went and lived separate. The property acquired from the funds of the contract business both prior to 1894 and apparently subsequent thereto is estimated at Rs. 60,000 and a schedule of such property is annexed to the plaint. The plaintiff charges that the first defendant as the senior brother and member of the joint family, consisting of himself and the plaintiff, has been and continues to be in possession of such property and that he has fraudulently transferred or pretended to transfer a portion of this property to his wife, the second defendant. Though it is not stated in the plaint that the plaintiff is entitled to an equal share with the first defendant in such property, yet it is evident that he claims an equal share on the footing that the property, of which an account is sought to be taken, forms the joint property of an undivided family, consisting of himself and his brother, the first defendant, such property representing the profits of the contract business carried on by himself and his brother with the aid and assistance of their sister, though not with the aid of any ancestral property belonging to them.

3. The first defendant, while admitting the relationship alleged in the plaint, denies that he carried on any joint contract business with the plaintiff or that they were members of a joint and undivided family, and jointly acquired the property in question; he also relies on the plea of limitation, if the suit is regarded as based on an alleged partnership between himself and the plaintiff in the business referred to in the plaint.

4. Of the issues framed in the case, the only two which have to be considered in this appeal are the first and the fifth, viz.: (1) Whether the plaintiff and the defendant joined in a contract business and jointly acquired therefrom the property mentioned in the plaint. (5) Whether the suit is barred by limitation.

5. Whether the first issue was intended to raise only the question that the acquisitions form joint family property under the Mitakshara law, on which footing the suit is evidently based, or also in the alternative, the question as to whether the plaintiff and first defendant carried on the contract business, as partners, is not clear

6. The questions chiefly argued on behalf of the appellant are--that the property in question forms the joint family property of the plaintiff and the first defendant, having been acquired by their joint labour and exertions and that as such it is liable to partition between them; (it) that, even if it cannot be regarded as joint family property, the plaintiff as a partner with the first defendant is entitled to an equal share in the profits of the contract business; and (in) that, in either view, the suit is not barred by the law of limitation.

7. In support of the first contention, the learned Advocate-General strongly relied upon the decision of the Privy Council in Rampershad Tewarry v. Sheochurn Doss 10 M.I.A. 490 of Mayne' 3 'Hindu Law and Usage' (6th edition). Assuming that the contract business in question was carried on by the joint labour and exertions of plaintiff and first defendant, the present case is, in my opinion, clearly distinguishable from the above case, the fundamental difference being that the business in the above case was carried on by and on behalf of all the members of the joint family, viz., the five undivided brothers--whereas in the present case plaintiff and first defendant are only two out of five brothers, who, with their father, constitute an undivided Hindu family, possessed of some joint ancestral property which it. is stated in paragraph 3 of the plaint has been employed by the father and the three elder brothers of the plaintiff and first defendant since 1874 when the plaintiff and first defendant, alleged to be of the age of 6 and 9 years, respectively at the time, left their family house and went to live with their married sister, who maintained and brought them up, and about 1887, three years after her husband's death, advanced them in business by her influence with the Madras Railway Company, with whom her husband had been carrying on contract business on an extensive scale. The first defendant married his sister's step-daughter in 1881 and the plaintiff, her own daughter in 1891; and until sometime in 1893, the two brothers with their wives were living together in their sister's family.

8. It appears from exhibit B, the draft of a partition deed, and from the oral evidence relating thereto, that an attempt was made in 1898 to effect a partition among the six members of the family, viz., the father and the five sons; but it fell through and was not completed, owing apparently to certain of the members not acquiescing in the proposed distribution and allotment of the property among the various members.

9. Bearing these facts in mind, I shall now proceed to consider the principles of Hindu Law which, in my opinion, bear upon the determination of the question whether plaintiff and first defendant can be regarded as owning the property in question as members of a joint family.

10. The Mitakshara doctrine of joint family property is founded upon the existence of an undivided family, as a corporate body Gan Savant Bal Savant v. Narayan Dhond Savant I.L.R. 7 Bom. 467 and Mayne's 'Hindu Law and Usage,' 6th edition, paragraph 270 and the possession of property by such corporate body. The first requisite therefore is the family unit; and the possession by it of property is the second requisite. For the present purpose, female members of the family may be left out of consideration and the conception of a Hindu family is a common male ancestor with his lineal descendants in the male line, and so long as that family is in its normal condition, viz., the undivided state--it forms a corporate body. Such corporate body, with its heritage, is purely a creature of law and cannot be created by act of parties, save in so far that, by adoption, a stranger may be affiliated as a member of that corporate family. Persons, who by birth or adoption are not members of a Hindu family, cannot, in the absence of a custom having the force of law, by more agreement, become or be made members of a joint family.

11. According to the above conception of a family, there may, of course, be one or more families all with one common ancestor, and each of the branches of that family, with a separate common ancestor.

12. As regards the property of such family, the 'unobstructed heritage' devolving on such family, with its accretions, is owned by the family as a corporate body, and one or more branches of that family, each forming a corporate body within a larger corporate body, may possess separate 'unobstructed heritage' which, with its accretions, may be exclusively owned by such branch as a corporate body.

13. The main family and its branches may possess joint property not only by operation of law but also by act of parties. Property acquired without the aid of joint family property, by one or more individual members there of,--whether they belong to different branches or to one and the same branch of the family,--may by act of parties be incorporated with the joint property of the main family or of one of its branches; and a stranger may also give property to the family as a whole (vide Radhabai Nanarav I.L.R. 3 Bom. 151 or to one of its branches vide Kunhacha Umma v. Eutti Mammi Hajee I.L.R. 16. Mad. 201 as a corporate body. Even if the undivided family is not possessed of any nucleus of property which has come to it as 'unobstructed heritage,' it may be that, by act of parties, property acquired jointly by all the members or separately by one or more members thereof, can be impressed with the character and incidents of unobstructed heritage or joint property belonging to the main family or to any of its branches. Property devolving by inheritance as 'obstructed heritage' on all the members of a joint family vide Gopalasami v. Chinnasami I.L.R. 7 Mad. 468 or upon any one of them, may likewise be impressed with the character of joint family property. But so long as a family remains an undivided unit, two or more members thereof--whether they be members of different branches or of one and the same branch of the family,--can have no legal existence as a separate independent unit; but if they comprise all the members of a branch, or of a sub-branch, they can form a distinct and separate corporate unit within the larger corporate unit and hold property as such. Such property may be the self-acquisition or obstructed heritage of a paternal ancestor of that branch as distinguished from the other branches, which property has come to that branch and that branch alone as 'unobstructed heritage'; or it may be the self acquisition of one or more individual members of that branch, which by act of parties has been impressed with the character of joint property, owned by that branch and that branch alone, to the exclusion of the other branches.

14. Mr. Mayne, in paragraph 277 of his book, while laying down that property acquired by the members of a joint family by their joint labour, would form their joint property, suggests a doubt as to whether their male issue would by birth alone acquire a right in such property. Apparently he inclines to the opinion that they would not, and that also appears to be the view taken by the Bombay High Court in Chatturbhooj Meghji v. Dharamsi Naranji I.L.R. 9 Bom. 438 cited by Mr. Mayne. If the joint acquirers intended to hold the property so acquired as co-owners and not as joint family property in the Mitakshara sense of that expression, this view would be perfectly sound. But, if, as supposed, the property was acquired by all the members of the undivided family, by their joint labour, it would, in the absence of any indication of intention to the contrary, be owned by them as joint family property and in that case their male issue, who, by their birth, become members of such undivided family, necessarily acquire a right by birth in such property. The natural persons, forming for the time being the members of an undivided Hindu family, fluctuate both by births and deaths in the family and any such person may also retire therefrom by civil death (Mayne on 'Hindu Law and Usage,' 6th edition, paragraph 603) or by renunciation on his part acquiesced in by the remaining members, provided such renunciation and acquiescence are manifested by an overt act namely, the giving him 'some trifle' out of the family property (Mitakshara, chapter II, Section II, verses 11 and 12; Stokes' 'Hindu Law Books,' page 380; Manu, chapter IX, p. 207; Yagnavalkya, 2--117). With all deference to Garth, C.J., I find myself wholly unable to concur in the proposition enunciated by that learned Judge that 'a mere declaration by one member, that he was separate from the others, would seem to be sufficient to effect the separation' in Radha Churn Dass v. Kripa Sindhu Dass I.L.R. 5 Calc. 474.

15. In any one of the above contingencies the normal undivided state of the family and its legal character as a corporate body is in no way affected or disturbed.

16. But if one or more members become divided by partition, it is not equally clear that the status of the remaining members as an undivided family in its normal condition continues unaffected. By some of the Hindu lawyers a separation, such as to give one or more members their several shares, is regarded as necessarily involving a general partition. Those who have not separated, are, on this theory, looked on as re-united (West and Buhler 'Hindu Law, 3rd edition, page 685). This view was adopted in some of the earlier decisions of the Calcutta High Court (vide Jandut Chunder Ghose v. Benodbeharry Ghose 1 Hyde 214 Petambur Butt v. Harischandra Dutt 15 W.R. 200 Sham Narain v. Court of Wards 20 W.R. 197Kesabram Mahapattar v. Nandkisor Mahapattar 3 B.L.R. 7 but is dissented from in a later decision of the same High Court, (Upendra Narain Myti v. Gopee Nath Bera I.L.R. 9 Calc. 817. So far as this Presidency is concerned, though there is no reported decision bearing directly on the point, Peddayya v. Ramalingam I.L.R. 11 Mad. 406 dictum at page 408 the principle generally recognized and acted upon is that though there can be no compulsory partial partition either in respect of the joint property belonging to the family, or in respect of the persons constituting the undivided family, yet by mutual agreement of parties the partition can be partial either in respect of the property or of the persons constituting the family. And according to usage and custom the remaining members of an undivided family from which one or more alone have become divided, continue as an undivided family in its normal state and not as members, who after partition have become re-united.

17. It is, therefore, impossible to regard the plaintiff and first defendant as forming in themselves an undivided family owning joint family property as a corporate body. I am aware that in Sham Narain v. Court of Wards 20 W.R. 197 which was not cited in the argument, it was held by a Division Bench of the Calcutta High Court that two, out of three undivided brothers forming a joint Hindu family, who between themselves held in common an acquired estate to the exclusion of the remaining undivided brother, might be regarded as having become divided and then re-united in respect of their shares of ancestral property and incorporated their common acquisition with their shares in the ancestral property.

18. In the present case, it has not been contended that plaintiff and the first defendant should be regarded, in respect of the property of which an account is sought to be taken, as re-united brothers and a partition effected between them on that footing. But even if such contention were open upon the pleadings in the cause and had been actually raised, I should have no hesitation in over-ruling the same and dissenting from the above decision of the Calcutta High Court. Unless some foundation were laid in fact for the theory of re-union, which necessarily pre supposes a division inter parties, there is no warrant for importing a fiction of division followed by a fiction of re-union for the purpose of impressing property acquired or owned exclusively by some members of an undivided family who do not in themselves form a branch family, with some of the incidents of joint family property. I say advisedly 'some' of the incidents of joint family property, for the re-united shares of re-united brothers and property acquired by them jointly after re-union are not on the same footing as the joint property of an undivided family in its normal condition. Such an estate is separately defined by the Hindu lawyers and partakes partly of the incidents of joint family property and partly of the incidents of separate property-- vide Ramasami v. Venkatesam I.L.R. 16 Mad. 440 Mayne's 'Hindu Law and Usage,' 6th edition, paragraphs 496 and 586; Mitakshara, chapter II, section IX).

19. It is next argued on behalf of the appellant that, even if the contract works carried on by the first defendant cannot be regarded as the joint family business of plaintiff and the first defendant, it must be treated as a partnership business between the two brothers. It is not alleged that there was any express agreement of partnership, but that as the plaintiff regularly combined his labour with that of the first defendant in carrying on the contract business, an agreement of partnership should be implied between them--especially as they were related as brothers. On the other hand, the position taken by the learned Counsel for the respondent is that the business was the sole business of the first defendant, but that the plaintiff was sometimes deputed by his brother to go and superintend the contract work when he, the first defendant, was unable to attend and that the plaintiff in order to receive training was now and then associated with him in superintending the contract business. The oral evidence on both sides as to the degree of attention paid by the plaintiff to the business and the supervision exercised by him over the same is, as usual, conflicting. But the preponderance and credibility of evidence is decidedly in favour of the plaintiff and I am satisfied that he was regularly and continuously contributing his labour and attention to the execution of contract works from 1888 to about the end of 1893; and I do not attach any importance to the defendant's contention that the plaintiff was too young to take any part in the contract business. Even according to the evidence of the defendant himself, the plaintiff was 15 years of age in 1887, if not older, and considering the nature of the contract works the plaintiff was of sufficient age to attend to them. The Madras Railway Company, no doubt, entrusted the contract work to the first defendant only and it was he alone that dealt with the company and had the financial management of the business. Admittedly it was the sister of the plaintiff and first defendant who introduced the first defendant to the railway engineer and secured to him the contract business by her recommendation. It is clear from her evidence as plaintiff's first witness that she intended the contract business for the benefit of both her brothers and that she regarded both of them as jointly carrying on business, but there is nothing to show that she communicated either to the plaintiff or to the first defendant that such was her intention in introducing the latter to the Madras Railway authorities. The business was started in 1887 with funds supplied to the first defendant from time to time by way of loan by one Chelvapillai Naidu under an arrangement that out of two and-a-half shares Chelvapillai was to have one share of the profits, the sister, half a share, and the defendant, the remaining one share. If the plaintiff was a partner with the first defendant, this one share would of course belong to both of them.

20. The first contract appears to have ended in a loss in 1890 and the sum of Rs. 800 and odd then found due to Chelvapillai was repaid to him by the first defendant from a loan advanced to him by his sister. It does not appear from the evidence that, beyond the said amounts, any capital was contributed for the business. The loan, no doubt, was raised by the first defendant, but it cannot be regarded as capital contributed by him, for, if the plaintiff was a partner with him in the business, the debt will bind both equally.

21. There being no express agreement between the brothers in regard to the contract business, the question that presents itself for consideration is whether, under the above circumstances, a contract of partnership should be implied or whether the proper inference to be drawn is that there was no legal relation between the brothers in respect of the business, but that the plaintiff regularly and systematically assisted his elder brother in carrying on the work in view to learn business himself or in expectation that his elder brother would deal with him generously, if profits were realized from the business or with both these objects.

22. In deciding this question one should of course have special regard to the social customs of the Hindus and to the fact that the plaintiff and the first defendant were brothers who were brought up and educated by their sister into whose family they married and with whom they lived, that the business in question was secured through the instrumentality of the sister, that the nature of the business was such that combination of labour was more important for success than contribution of capital and that the plaintiff's association with his brother in the business for a period of nearly six years was not casual but regular and continuous. It is immaterial whether or not the plaintiff bestowed upon the business as much time and attention and exercised as effective and as great a degree of supervision over it as his elder brother, the first defendant. Bui for the plaintiff's conduct subsequent to 1893 and a portion of his evidence in this suit-- both of which will be presently adverted to,--I should have no hesitation in holding as a juryman that both the plaintiff and his sister (who introduced the first defendant into the business) all along bond fide entertained the belief that plaintiff was interested equally with first defendant in the business, that the first defendant must have been fully aware that the sister introduced him into the business expecting that both the brothers who were living with her were to be benefited by it and that the plaintiff was devoting his time and attention to the business, fully believing that he was equally entitled with his elder brother to the profits of the business. Under these circumstances, an agreement of partnership would be implied by law; and adverting to the principles of the law of estoppel embodied in Section 115 of the Indian Evidence Act which is the same as the English Law, I may also add that it was the duty of the first defendant to speak out his mind, if it was his intention that the business was to be exclusively his own and that the plaintiff was to have no interest in it as a partner. His silence was culpable and he is estopped from contending that the plaintiff was not his partner in the business Sarat Chunder Dey v. Gopal Chunder Laha L.R. 19 IndAp 203. The principle applicable to such a case is nowhere stated more lucidly than by Lord Kingsdown in his judgment in Ramsden v. Dyson L.R. 1129 H.L.170. 'If a man, says his Lordship,' under a verbal agreement with a landlord for a certain interest in land or what amounts to the same thing, under an expectation created and encouraged by the landlord that he shall have a certain interest takes possession of such land with the consent of the landlord and upon the faith of such promise or expectation with the knowledge of the landlord and without objection by him lays out money upon the land, a Court of Equity will compel the landlord to give effect to such promise or expectation. This was the principle of the decision in Gregory v. Mighell 18 Ves. 328 and as I conceive is open to no doubt.'

23. This conclusion receives support from the circumstance that sometime after there was first a breach between the first defendant and his sister in 1893 and subsequently the relations between the brothers themselves became rather strained, and the first defendant removed to another house of his own, leaving the plaintiff to continue to live with his sister, she exerted her influence with the railway authorities and secured separate contracts directly to the plaintiff himself. Since then the plaintiff has been working the contracts he secured to himself separately and the first defendant working his contracts separately and sometimes in partnership with one or other of his brothers. The plaintiff and the first defendant, however, were sometimes helping each other in regard to their respective contracts, but the plaintiff's proposal to take the first defendant as his partner in his Ennore contract, was not accepted by the latter. During all this time and until the 4th August 1900 (the date of exhibit XLIII) the plaintiff does not appear to have asserted any claim to any of the properties acquired by the first defendant. The suit itself was instituted on the 19th September 1900 within six weeks after the date of the exhibit.

24. As regards the draft partition deed, (exhibit B), dated 24th May 1898, I think it highly probable that the first defendant was the author and moving spirit of it and that the plaintiff, whether under advice or not, refused to consent to its terms and declined to sign it. It is not clear whether he then advanced a claim to a half share of the earnings made by the first defendant from the contract business. It is possible that but for this attempt at partition the plaintiff might not have advanced any claim to the properties in question. The proposal having fallen through, the first defendant naturally grew anxious and had recourse to certain benami transfers of property in the name of his wife, the second defendant.

25. The exhibit which is most unfavourable to the plaintiff's case is exhibit II (14th December 1893), in which the plaintiff refers to one of the properties comprised in the plaint schedule as the garden of 'his brother' the first defendant while in the same letter be refers to the garden house of his sister in which he was living with her as 'our garden,' identifying himself apparently with his sister. If, as now claimed, the brother's garden therein referred to was the joint and common property of himself and his brother, it is very curious that he should refer to it as his brother's garden. Further, in his deposition, he states as follows: 'After the award, my brother went to live in the house' (referred to in exhibit II as the first defendant's garden)' we both erected at Madavakum, because he was displeased with my sister. Sometime after, there was a quarrel between us. He would not give me money, I asked for, while I was working for him .... We quarrelled because my brother would not give me money.' No questions have been put to the plaintiff about this statement in view to its elucidation. Prima facie the statement indicates that plaintiff expected to be rewarded or remunerated for his having worked with the defendant in connection with the contract. If the earnings had been regarded as the joint family property of himself and the first defendant or as the profits of the first defendant's business in which plaintiff was a partner, he would not have simply demanded money for his having worked with the defendant in the business--a demand which implies that he expected reward or remuneration for his trouble--but he would have demanded his one half share in the defendant's earnings, a considerable portion of which was converted into house or landed property. He was not even paid any money as demanded by him. This was about the end of 1893 or beginning of 1894 and the plaintiff took no action whatever to assert his claim. This conduct on the part of the plaintiff coupled with the allusion in exhibit II to one of the properties mentioned in the plaint schedule as his brother's garden leads to the inference that, for some reason or other which is not apparent on the record, the plaintiff when he was attending to the contract business of his brother and superintending it, did not do so with the understanding that he was to have a share in the profits of such business but that he only expected to be rewarded for his trouble and treated generously by his brother. In deciding whether or not the two brothers carried on the business as partners I attach no significance to the arbitration proceedings in 1893 between the sister and the defendant in the matter of the contract business. There was then no occasion to define or refer to the relations between the plaintiff and the defendant in respect of the contract works. There was then no dispute between the brothers in regard to those works and the arbitrators had only to decide what amount was due to the sister.

26. I now proceed to consider the question of limitation. If the properties, of which an account is sought to be taken, were the joint family property of the plaintiff and the first defendant, the plea of limitation will clearly be of no avail. But, if the plaintiff and the first defendant were partners in the contract business, which partnership, if any, clearly terminated about the end of 1893 or beginning of 1894, the suit is clearly barred by the law of limitation, and in this view the plaintiff's suit fails, even if the contract business in question was carried on in partnership between the brothers. It is apparently in anticipation of the plea of limitation that the plaintiff claims a share not only in the profits of the contract business which was carried on until about the beginning of 1894, but also in the profits of the business subsequently carried on by the first defendant, the profits of which latter business appear to have been much larger than the profits made till 1894.

27. A reference to the evidence of plaintiff and the first defendant and their sister clearly shows that if there was partnership between the plaintiff and the first defendant, it came to a termination--which is the same as a dissolution --sometime in 1894 and that, as already mentioned, the first defendant thereafter continued that business on his own account, and also undertook and carried on fresh contract business by himself or sometimes in partnership with one or other of his other brothers and that the plaintiff too obtained from the railway authorities other contract work for himself and carried on the same on his own account. The plaintiff says that the Ennore contract work which he obtained in 1894 and which he was carrying on for four years and which resulted in a profit of about Rs. 3,000 was his own concern and not a joint undertaking with the first defendant. But on the other hand, he says that he claims a half share in the profits of the first defendant's contract works even subsequent to 1894, not on the ground that he was working with his brother as before in the execution of the work, but by reason of an understanding with his brother that the latter 'should deal with him as he had been doing before and should not think of injuring him.' The understanding herein referred to is vague and indefinite and there is no reliable evidence in support of it.

28. From the year 1894, therefore, the plaintiff ceased to be a member of the alleged partnership (vide Section 253, Clause 7 of the Indian Contract Act), and in fact he retired from the partnership, which had not been entered into for any fixed term (Clause 8 of Section 253, Indian Contract Act). It is therefore clear that the present suit, viewing it as one for winding up the affairs of the partnership which terminated or was dissolved in 1894, is barred by the Law of Limitation. The fact that after retirement of one of two partners, the remaining partner carries on the same business makes no difference Knox v. Gye L.R. 5 H.L. 656. The case of Noyes v. Crawley L.R. 10 Ch.D. 3 cited on behalf of the respondent is in point and at page 39 Malins, V.C., expresses his full concurrence in the following statement of the law by Lord Lindley in his treatise on 'Partnership,' 4th edition, page 966--'So long, indeed, as a partnership is subsisting and each partner is exercising his rights and enjoying his own property, the Statute has, it is conceived, no application at all; but as soon as a partnership is dissolved, or there is any exclusion of one partner by others, the case is very different and the Statute begins to run.' The same learned author, on the authority of Pearce v. Lindsay 8 G.J. & Sm. 139 says that a dissolution of a partnership at will may be inferred from circumstances, e.g., a quarrel, although no notice to dissolve may have been given (Lindley on 'Partnership,' 5th edition, page 572). Having regard to the above authorities and clauses 7 and 8 of Section 253 of the Indian Contract Act, it is impossible to accede to the contention of the learned Advocate-General that there has yet been no dissolution of the alleged partnership between the plaintiff and the first defendant and that therefore the suit is not barred by Article 106 of the Indian Limitation Act. In support of this contention, he strongly relied upon the recent decision of the Privy Council in Moung Tha Hnyin v. Mah Thein Myah L.R. 27 IndAp 189 : I.L.R. 28 Calc. 63. In that case, however, no plea of limitation was raised, but the defence relied upon was that the plaintiff, who was admittedly a partner in the business, abandoned all his right, title and interest in the partnership business, and his share in the concern and was therefore not entitled to sue for an account. It was found by both the Indian Courts that there was no dissolution and that the plaintiff did not abandon his interest in the partnership. It is impossible to gather from the report, whether, upon the facts of the case, the plea of limitation could have been taken, though as a matter of fact it was not taken in any of the Courts. At page 59 their Lordships of the Privy Council observe as follows: 'There was, however, no more evidence of express abandonment than of consent and there was some evidence of the plaintiff's subsequent intervention in the partnership affairs.' If such subsequent intervention was within three years before the date of the suit, there could be no foundation whatever for raising a plea of limitation. The whole judgment and the English authorities cited by Counsel in argument and in the judgment of the Privy Council clearly show that the question of limitation was not at all before their Lordships and that the decision proceeded on the ground that 'there has been no abandonment on the part of the plaintiff or loss of his interest in the partnership by laches.' In the present case, if there was a partnership between the brothers, it cannot be, and is not, contended that the plaintiff abandoned his interest therein until its termination but only that his right to sue for an account is barred by the Law of Limitation.

29. It was further contended by the learned Advocate-General that the three years' period of limitation prescribed by Article 106 would be inapplicable to houses and lands purchased by the first defendant from the profits of the partnership. This contention would certainly hold good if it had been alleged and proved that, from time to time, portions of the assets of the partnership were, by the agreement of the partners, withdrawn from the partnership and converted into land or house to be owned by the partners as co-owners (Lindley on 'Partnership,' 5th edition, pages 334 and 335).

30. In the absence, therefore, of any such allegation and proof, lands and houses bought in the name of one partner and paid for by the firm or from the profits of the partnership business are prima facie partnership property. Nerot v. Burnand 2 Bh.215 Wedderburn v. Wedderburn 22 Beav. 104.

31. The case is therefore governed by the ordinary rule that, unless a contrary intention appears by express agreement, or by the nature of the transaction, property bought with money belonging to the firm, is deemed to have been bought on account of the firm (Bank of England Case (1)).

32. If the plaintiff's suit on the footing of partnership were sustainable, and the same be not barred by limitation, the remedy he would be entitled to in this suit would be, not to a decree for partition of partnership properties, but to an order for winding up the business of the partnership by sale of its effects, including lands and houses, providing for the payment of its debts, if any, distributing the surplus of the sale proceeds according to the shares of the plaintiff and first defendant respectively.

33. In my opinion, therefore, the appeal fails and should be dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //