Skip to content


Vyrathammal Vs. Somasundaram Pillai and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai High Court
Decided On
Reported in(1959)2MLJ429
AppellantVyrathammal
RespondentSomasundaram Pillai and ors.
Cases ReferredPeeran Sahib v. Jamaluddin Saheb A.I.R.
Excerpt:
.....be imported into the law contrary to the rules of procedure which are clearly laid down. in a suit for accounts one of the partners, without whom the suit could not proceed, was not made a pro forma defendant, until the claim against him was barred, held that once he became a party, the suit could not fail for non-joinder and the period of limitation against the contesting partners could not be affected by the fact that he was impleaded after the period of limitation had expired. , held that even if a new partnership was constituted out of the old partnership which stood dissolved by the death of a partner the suit would be barred by limitation and would be bad for non-joinder if the other heirs of one of the partners who were admittedly alive at the date of suit were not brought on..........is no rule in the code of civil procedure or otherwise applicable to the courts in u.p. that no suit for accounts of a partner shall proceed unless all the partners are impleaded as plaintiffs or defendants. nor is there any reason in equity, justice and good conscience why any such rule should be imported into the law contrary to the rules of procedure which are clearly laid down.in a suit for accounts one of the partners, without whom the suit could not proceed, was not made a pro forma defendant, until the claim against him was barred, held that once he became a party, the suit could not fail for non-joinder and the period of limitation against the contesting partners could not be affected by the fact that he was impleaded after the period of limitation had expired.but the matter.....
Judgment:

Ramaswami, J.

1. This Second Appeal is preferred against the decree and judgment of the learned Subordinate Judge of Tirunelveli, in A.S. No. 52 of 1956, confirming the decree and judgment of the learned District Munsif of Tuticorin, in O.S. No. H2 of 1953.

2. The undivided father of the defendants 1 and 2, T.S.S. Subramania Pillai, and one A.R. Chidambaram Pillai of Kulasekharapatnam were carrying on a partnership business styled as 'Sivaprakasam Press' at Tuticorin. Under a registered document, dated 18th September, 1916, the plaintiff's father purchased 2/6th share of the said Chidambaram Pillai in the said business out of the joint family funds of the family consisting of himself and his sons, viz., the brothers of the plaintiff. That transfer was recognised by the other partner, the father of defendants 1 and 2. The plaintiff's father thus became a partner in the firm for and on behalf of his family as and from 18th September, 1916. The amount to his credit as transferee partner had been duly credited in the accounts of the firm. Owing to certain domestic reasons, in 1924 the plaintiff's father effaced himself from the partnership and the plaintiff's mother, with the rather significant name of Bagampiriyal Ammal, got substituted in his place. But as a matter of fact, the father and sons seem to have been carrying on the business with the mother signing formally the important documents.

3. After the death of the plaintiff's father in January, 1942, the plaintiff's brothers appear to have divided the lands of the father which were in the name of the mother and they also appear to have taken over this business, Sivaprakasam Press. While the business of the firm was being continued by defendants and the plaintiff's brothers, one Kalikavalaperumal Pillai, who was locally managing the business of the firm for over 40 years, appears to have been taken in with the consent of the other partners as a working partner, having an one-fourth share in the business of that firm. This working partner was to get a share of the profits but not to participate in the losses. It was in this manner that the business was going on till the plaintiff's mother fell ill in about December, 1949.

4. It is stated that in or about March, 1950, in the presence of Kalikavalaperumal Pillai, the first defendant and the plaintiff, the plaintiff's mother expressed her wish to her sons that they should make some provision even while she was alive in respect of the residence and maintenance of her daughter the plaintiff. On her suggestion, to which the three brothers of the plaintiff agreed, it was settled that out of the amount standing in the account of the firm to the credit of the joint family in the name of the mother, a sum of Rs. 1,000 was to be paid at the time of the marriage of each of the four unmarried daughters and the unmarried son of the plaintiff, the total amount coming to Rs. 5,000. It was also settled that the plaintiff was to be given for her enjoyment house No. 49, South Car Street, Tirunelveli Town, which had been purchased in the name of the first defendant but out of the amount standing to the credit of the family of the plaintiff's brothers in the name of their mother. This arrangement has been implemented and there is no dispute about it or repudiation of the same earlier or now before me and to which all parties agreed, viz., Rs. 5,000 was credited on 30th June, 1950, in the ledger page opened in the name of the plaintiff in the accounts of the firm and the balance of the amount of the plaintiff's brother's joint family, viz., Rs. 24,685-10-6 was credited on the same date in the ledger page opened in the names of the plaintiff's brothers. In other words, under a family arrangement, in full quit the plaintiff without claim on this Sivaprakasam Press or other properties of her father, was given a sum of Rs. 5,000 and that sum stands credited in the accounts even to-day for the plaintiff and she is also said to be occupying the house. To such an arrangement great importance will be attached by Courts in the absence of proof of mistake, inequality of position, undue influence coercion and like ground and which is not the case here. The parties thereto will not be allowed to deny ignore or resile from this valid and binding arrangement. This principle will be equally applicable where some members of the family are minors : Sidh Gopal v. Bihari Lal : AIR1938All65 . Binda Kuer v. Lalita (1936) 44 L.W. 546 : 41 C.W.N. 161 Hardei v. Bhagwan (1919) 13 L.W. 436 . Bishambar v. Amarnath 46 L.W. 94. Dangal Ram v. Jai Mangal A.I.R. 1926 P. 364.

5. The plaintiff's mother died on 20th April, 1950 and it will be noticed that the plaintiff's brothers have dutifully carried out the family arrangement by the entry made in the accounts on 30th June, 1950 and have allowed the plaintiff to take possession and occupy the house. It is in these circumstances that the plaintiff has filed the suit, out of which this Second Appeal arises, for dissolving the partnership business of Sivaprakasam Press at Tuticorin and for taking of accounts. This suit was filed on 20th April, 1953. On that date Kalikavalaperumal Pillai was not on record as a defendant. On objections raised by the defendants, he was brought on record as the sixth defendant on 10th July, 1954, as per order on I.A. No. 599 of 1954. There is no dispute that if that date 10th July, 1954, has to be taken as the date for calculating the limitation period, then the suit will be plainly barred. Both the Courts below held that the suit was barred by limitation. Hence this Second Appeal by the defeated plaintiff.

6. The short point for determination in this Second Appeal is whether by reason of Kalikavalaperumal Pillai not being on record when the suit for dissolution of partnership and taking of accounts was filed, it is bound to fail as being barred by limitation, because if the date on which Kalikavalaperumal Pillai was brought on record, viz., 10th July, 1954, is to be taken as the date of institution of the suit, then it will plainly make the suit being instituted far beyond the three year period.

7. The learned advocate Mr. Veeraraghavan, in an informed and interesting argument propounded that this Kalikavalaperumal Pillai will only be a proper party and not a necessary party and that therefore the bringing him on record on a later date would not make the suit barred by limitation. In support of this proposition he relied upon the decision of a Single Judge of the Allahabad High Court in Jamna Kunwar v. Kunj Behari : AIR1937All502 . That decision undoubtedly supports the contention of the learned advocate Mr. Veeraraghavan because it was held there.

There is no rule in the Code of Civil Procedure or otherwise applicable to the Courts in U.P. that no suit for accounts of a partner shall proceed unless all the partners are impleaded as plaintiffs or defendants. Nor is there any reason in equity, justice and good conscience why any such rule should be imported into the law contrary to the rules of procedure which are clearly laid down.

In a suit for accounts one of the partners, without whom the suit could not proceed, was not made a pro forma defendant, until the claim against him was barred, held that once he became a party, the suit could not fail for non-joinder and the period of limitation against the contesting partners could not be affected by the fact that he was impleaded after the period of limitation had expired.

But the matter does not really stand there, because this view does not find support in the other decisions to which reference will be made presently.

8. In Ramdoyal v. Junmenjoy Coondoo I.L.R.(1887) Cal. 791. which has been referred to and followed in a decision of this Court to which reference will be made presently, it was held that in a suit brought for partnership accounts, where upon the objection raised by the defendant it was found that a necessary party defendant had been omitted and such party was afterwards added as a defendant at a time when the suit as against him was barred, that the whole suit was rightly dismissed.

9. In Ambika Charan Guha v. Tarini Charan Chanda 18 C.W.N. 464, the facts were : The plaintiff brought a suit for the accounts of partnership making parties thereto his other partners and one only of the two sons of a deceased partner who died after the partnership business came to an end but before the suit was instituted. On objection being taken the other son of the deceased partner was brought on the record after the expiration of the period of limitation. It was held that inasmuch as all the partners or their representatives were necessary parties and inasmuch as under Section 22 of the Limitation Act the suit must as regards the added defendant be deemed to have been instituted when he was made a party, the whole suit was barred by limitation.

10. In Sayyed Abdul Hawk v. Tumuluri Vaikuntam (1926) 52 M.L.J. 318. Ramesam, J., held that even if a new partnership was constituted out of the old partnership which stood dissolved by the death of a partner the suit would be barred by limitation and would be bad for non-joinder if the other heirs of one of the partners who were admittedly alive at the date of suit were not brought on record. The learned Judge further held that all the heirs of a deceased partner ought to be made parties to a partnership action.

11. In Amichand Nagindas & Co. v. Raoji Bhai Moti Bhai Patel (1929) 58 M.L.J. 613 the necessity for bringing on record a working partner also in a suit for dissolution of partnership and taking of accounts has been pointed out. It was held:

If a master engages several servants successively and independently each to be remunerated by a share in the profits, and if one of these servants wishes to sue him for his share in the profits, it will not be necessary for that servant to implead all the other servants. But the position is very different when by one arrangement or contract a master and a number of servants agree that they will work together for a certain time or for a certain venture and that the whole profits will be divided among them in certains! proportion ; in such a case one servant cannot get his share fixed nor get an account of the profit without making the other servants parties to his suit. The fact, that no objection on the ground of the non-joinder of the other servants was taken by the master in such a suit does not give jurisdiction to the Court to make such a decree under Order i, Rule 9 of the Civil Procedure Code, and if the trial Court passes such a decree, the appellate Court is not prohibited by Section 99 of the Civil Procedure Code from setting aside that decree, as this section does not prevent the appellate Court from interfering on the ground of non-joinder which affects, the jurisdiction of the trial Court. Ramdoyal v. Junmenjoy Coondoo I.L.R.(1887) Cal. 791. relied on.

12. In Yakub Ibrahim v. A. Gulambhas : AIR1958Bom51 . Desai, J., held as follows:

The subject-matter of a partnership suit generally is the severance of the jural relationship and the determination of the mutual rights of the partners. There being mutual agency and mutual obligation to render accounts, the position of parties in a partnership suit is in some particulars different from that of parties in an ordinary suit. Each of the partners in a partnership suit, is really in turn plaintiff and defendant and in both capacities comes before the Court for the adjudication of his rights or liability relatively to the other partners which the Court endeavours to determine by its decree. In such a suit it is well-established that a decree can go either in favour of the plaintiff against the defendant or in favour of any defendant or defendants against any other party or parties to the suit. In a partnership suit all the partners or their legal representatives must be made parties because all the parties necessary for the disposal of the subject-matter of the suit including taking of accounts must be before the Court or the suit will fail. Proper and complete accounts can be taken as between some only of the partners. The necessary corollary of this is that if a necessary party has been omitted and added at a time when the suit against him is barred, the whole suit will be dismissed. The same consideration must apply where in a partnership action by a partner against his other partners, the claim is barred against some of those partners but the bar of limitation is saved against some other or other partners by virtue of any acknowledgment and this is for a simple reason that when accounts are taken in any such suit all the partners would not be before the Court. In such a case there is no-estoppel against the partner who has acknowledged his liability. The reason of the rule is that accounts between a number of partners cannot properly be taken by the Court in the absence of any of them. It may be that in a particular case this rule might result in hardship or even defeat a just claim of one partner against another. It may be that the absence of the partner against whom the suit is barred by limitation would not ultimately have made any real difference in the actual result of the accounts.. It may also be that on proper taking of accounts that partner might turn out not to be a debtor of the firm or of the other partners but something may be found due to him. But all these considerations cannot override the application of the statute of limitation and after all these statutes of repose are not intended to help those who slumber and sleep over their rights. Therefore, if the plaintiff did not choose to bring his action for nearly four years after the dissolution of the partnership, he has to blame himself if he is not able to get any relief from the Court.

In Peeran Sahib v. Jamaluddin Sahib A.I.R. 1958 Andh. Pra. 48 the facts were : One K, a Muhammadan, was carrying on an indigo business with three other partners. K owned a half share and the other half was owned by the other partners. K died in 1900 leaving behind his widow, four sons and a daughter S. On K's death the business of the firm was carried on as before by K's eldest son as representing the half share of all the sons of K and the representative of the other partners according to directions, contained in K's will. The plaintiffs who were the son and grandaughter of S filed a suit for dissolution of partnership and accounts on the allegation that the partnership business was carried on by the manager chosen from the representatives of the two main shares and the said managers were managing the affairs of the company for themselves and for the benefit of all the heirs of K and the partners including the heirs of such of those who died subsequently. It was held

(i) On the evidence that the plaintiffs had failed to prove that they or persons through who, they claimed were either taken as partners in the business carried on subsequent to K's death or that there was any implied agreement to carry on the business in partnership by taking in the legal' representatives of a deceased partner.

(ii) Under Section 42, Partnership Act, the partnership was dissolved on the death of K, there being absolutely no evidence on record for implying a contract between the parties to exclude the statutory termination of the partnership under Section 42.

(iii) That the plaintiffs' claim could not be sustained on the basis of Section 37, Partnership Act. The suit was not to enforce rights under Section 37, for the plaintiffs did not claim as representatives of a deceased partner for recovery of the profits earned by the partner's assets being utilised by the surviving partners but for accounts as partners of the firm.

(iv) A suit by the heirs or legal representatives of a deceased partner for accounts and a share of profits under Section 37, Partnership Act, would be governed by Article 106 and not by the residuary Article 120 of the Limitation Act and time would commence to run from the date of death of the partner on which date the partnership must be deemed to be dissolved, in the absence of any agreement for taking in the legal representatives of the deceased partner as partners.

13. Article 120 is a residuary article and it can be invoked only in a case where there is no specific article governing a particular relief.

14. To sum up, as against this current of decisions, the decision in Jamna Kunwar v. Kunj Behari : AIR1937All502 . would not prevail for establishing the position taken by Mr. Viraraghavan.

15. The learned advocate Mr. Veeraraghavan advances another line of argument, based on the decision in Nilmadhab v. Mirada Sundari 45 C.W.N. 1065, as follows : A suit brought on the death of a partner by his legal representative for accounts of the partnership business since such partner's death, is not governed by Article 106 of the Limitation Act, inasmuch as the right of the legal representative is not to a share of the profits of a dissolved partnership within the meaning of Article 106, but a right accruing to him by subsequent dealing with the assets belonging to the deceased partner. Where on the death of a partner, the partnership business is continued by the remaining partners, the representative of the deceased partner is entitled to the share of his predecessor-in-interest in the assets and to the profits attributable to the use of that share and he is entitled to have accounts in order to the determination of the profits under Section 37 of the Partnership Act as he formerly was so entitled under Section 88 of the Indian Trusts Act and as rule of justice, equity and good conscience. This decision undoubtedly supports the stand taken by the learned advocate for the appellant. In this case the old partnership had been taken over with all its. assets by the new partnership and all that the plaintiff wants is a return back of the share of the assets taken over by the new partnership and that therefore following the above decision it should be held that the suit is not barred by limitation. The learned advocate also draws my attention to a decision of a like nature in Nagaranjan v. Robert Hotz .

16. The learned advocate for the respondent Mr. Ramamurthi points out two vital infirmities which prevent us from accepting this line of argument. First of all, the suit itself has not been framed in the manner now sought to be pleaded. On the other hand, the suit is for dissolution of partnership and taking of accounts simpliciter. Secondly, there is a line of decisions which would go against the contention of the learned advocate Mr. Viraraghavan. In Ahinsa Bibi v. Abdul Kader Sahib I.L.R.(1901) Mad. 26, as early as 1901 a Bench of this Court held that Article 106 of the Limitation Act would apply. In Joopoody Sarayya v. Lakshmanaswamy (1913)25 M.L.J. 128:1.L.R. 36 Mad. (P.C.) , their Lordships of the Privy Council have held that a suit of this nature not brought within three years, from the date of death of Bagampiriyal Ammal was barred by Article 106 of the Limitation Act. See also Peeran Sahib v. Jamaluddin Saheb A.I.R. 1958 Andh. Pra. 48.

17. The net result of this analysis is that this second appeal is bound to fail and it is dismissed but in the circumstances without costs.


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