1. This second appeal arises out of a suit for the recovery of the plaintiff's one-third share in certain items of immovable property and for incidental reliefs. It is the plaintiff's case that his deceased brother Yerikalappa, the second defendant and Nettekalappa the father of the first defendant were partners in an Abkari business from 1892 to 1904, that out of the funds of that business they purchased the suit properties, that in 1904, there was a dissolution and settlement of accounts between them evidenced by Ex. A, that under that arrangement provision was made for the discharge of debts and for division of the outstandings and that as regards the immovable properties which had been purchased with the funds of the partnership, the three partners agreed that they should be entitled to the same in equal shares. The plaint adds that for many years after the date of Ex. A, Yerikalappa and after his death the plaintiff as his surviving brother were receiving his one-third share of the income of the suit properties. The plaint prayed for division of the immovable properties thus held in common. The first defendant, who is the principal contesting defendant, pleaded ignorance of the alleged partnership and of all that is said to have happened in 1904, though in the written statement some kind of reference is made to a dissolution 25 years ago. The positive case put forward on behalf of the first defendant was that the items now claimed by the plaintiff to be the common properties of the partners were the self-acquisitions or separate properties of the first defendant's father and the first defendant also raised pleas of limitation and adverse possession.
2. A number of issues were framed in the case and they were substantially decided in the plaintiff's favour by the first Court which gave him a decree for partition. On appeal, the learned District Judge reversed the trial Court's decree and dismissed the suit partly on certain grounds of law and partly on what may best be described as a mixed finding. Hence this second appeal by the plaintiff. So far as the lower appellate Court's judgment can be described as embodying a finding of fact, such finding is based on such an obviously erroneous approach to the case that I am unable to accept it as a finding binding on me.
3. The learned District Judge accepts the existence of the partnership alleged in the plaint and its dissolution in 1904, and also seems to agree with the trial Court's view that the items of immovable property now claimed were purchased with the funds of that partnership. Though with reference to Ex. A he makes some observations suggesting a feeling of distrust in his mind, I do not read them as throwing any doubt on the genuineness of Ex. A because the first defendant himself accepts its genuineness. What seems to have oppressed the learned Judge is that in spite of Ex. A the first defendant's father was allowed to have the properties registered in his own name during all the time that he lived, that is, up to 1918, and that he was allowed to enjoy the properties exclusively. The strongest disproof of the exclusive enjoyment or exclusive title of the first defendant's family is the admitted partition deed Ex. D in that family which proceeds on the footing that family had only a third share in these items; and without any conceivable reason or explanation, the learned Judge brushes it aside with the remark that the recital in Ex. D that the first defendant's family was entitled only to a third share in those properties might be due to the ignorance of the first defendant as to the exact properties to which he and his father are entitled. The first defendant never pleaded ignorance and till he came into the witness-box he had never suggested that there has been any mistake, in this respect in Ex. D. Even when he was put questions about Ex. D he nonchalantly pretended ignorance that there was any such statement in Ex. D. It passes my comprehension how the learned Judge when asked to consider the weight of an admission of that kind by a party could ignore it on some guess of his own without any plea or explanation by the party making the admission.
4. If it were necessary for the case, I should be prepared to say that Ex. D is the strongest proof that the first defendant's family must have been giving to the other two sharers their shares of the income; but it is not necessary for the purpose of the case to come to any such finding. It is sufficient to rely upon Ex. D for two purposes (1) to repel all suspicion which the learned Judge gratuitously casts on Ex. A because so late as in 1921, Ex. D asserts just the one-third right which Ex. A gave to the first defendant's family, and (2) to negative the plea of adverse possession; the first defendant candidly admits in the witness-box that he never asserted any exclusive title in himself to the knowledge of the plaintiff and in the face of the claim of a title only to one-third in Ex. D it is impossible to hold that the first defendant who was only a co-tenant could ever have proved ouster of the plaintiff.
5. The learned Judge's suspicion against Ex. A seems to have been excited by the disappearance of the later pages in Ex. A. No question has been put suggesting any particular hypothesis as to this disappearance. In the very nature of things the book could not have been in the plaintiff's custody from the outset and so long as the genuineness of Ex. A is undisputed, it seems to me immaterial for the purpose of the decision of the questions raised in this case, what happened in the course of the later business said to have been carried on in partnership between the plaintiff and the first defendant's father. If the first defendant had pleaded that in connection with the later partnership the rights of the parties as settled at the time of Ex. A had been changed, I can understand a comment about the disappearance of the later pages in Ex. A or the non-production of accounts relating to the later partnership. Neither in the written statement nor in his evidence did the first defendant put forward any such case. His whole case was that the property was from the very beginning the separate property of his father except as regards a one-third in certain items in respect of which the case as put forward through D.W. 2 was that the plaintiff's brother gave it up some time in 1901. This last story is clearly disproved by Ex. A. In this state of the pleadings, I am unable to appreciate the learned Judge's criticism against the plaintiff's case, on the ground that the Court has not been put in possession of any information as to what happened in connection with the later partnership. Neither party made these later transactions any part of the case and the plaintiff was therefore not called upon to adduce any information about what happened during that later partnership. Knowing something of the habits of the people of this country, I am unable to attach any importance to the registry in the revenue records in the first defendant's father's sole name or to the issue of patta in his name. In the face of Ex. D, these considerations seem to me very slender to base any argument upon. I have therefore no doubt that the first defendant on whom the onus should properly be laid of disproving the continuance of the title evidenced by Ex. A has wholly failed to discharge that onus and that on that ground the finding of the trial Court in plaintiff's favour on the question of title should be restored.
6. The learned District Judge has also decided against the plaintiff on two points of law (1) a question of limitation and (2) a point of registration. So far as the decision on the auestion of limitation is concerned, I am unable to accept the learned Judge's conclusion that Article 106 is any bar to the maintainability of the present suit. In Gopala Chetty v. Vijaya-raghavachariar (1922) 43 M.L.J. 305 : L.R. 49 IndAp 181 : I.L.R. 45 Mad. 378 (P.C) the Privy Council recognise the possibility that on a dissolution the partners may settle the accounts of the partnership between themselves. If that has been done, there is no longer any question of a suit for dissolution and accounts within the meaning of Article 106. That is just what happened in this case. Ex. A is admittedly a memorandum drawn up on the dissolution of the partnership and embodying the settlement between the partners as to their respective rights on settlement of the accounts of that partnership. I fail to see how any question of Article 106 arises after that stage. The decision in Gobardhan v. Ganeshi Lal (1911) 11 I.C. 288 cited before me by the learned Counsel for the respondent is clearly distinguishable. In that case, there had been no settlement of accounts between the partners after dissolution and the suit itself was brought as one for dissolution and taking of accounts. The Court however found that by reason of the death of one of the partners, the partnership had become dissolved in law more than three years before the institution of the suit. It was therefore obviously a case in which the accounts of a dissolved partnership had to be taken. To such a suit Article 106 clearly applies. An attempt was then made to dissociate so much of the plaintiff's claim as related to certain items of immovable property from the bar under Article 106. The learned Judges, if I may say so, rightly held that such a dissociation was impossible. It was not a suit governed by Article 142 or Article 144; the immovable properties were claimed on the very ground that they formed part of the partnership assets and where the accounts had not been taken, no Court could grant relief in respect of some items alone of the partnership without taking the accounts of the partnership as a whole. It is in those circumstances that the learned Judges observed that a right to a division of the house could not be established until after a full account had been taken of all the partnership assets and as a suit for the latter purpose was barred, it was not possible to grant any independent relief in respect of the items of immovable properties alone.
7. The objection under the Registration Act has caused me greater difficulty, not on the particular ground adopted by the learned District Judge but on a somewhat different ground. The learned District Judge speaks of a transfer of title from the partnership to the partners individually, as the reason for insisting upon the registration of Ex. A. That perhaps is not a correct way of putting it; because a partnership is not a legal entity like an incorporated body and during the subsistence of the partnership the title to immovable properties brought into the partnership or purchased with its funds vests in the partners and not in the partnership as such. As pointed out in Samuvier v. Ramasubbier : AIR1931Mad580 it follows from the provisions of Section 253 of the Contract Act that all immovable property purchased with partnership funds must be deemed to be held by the partners as joint owners. Though Ex. A is therefore not a transfer from the partnership to the individual partners, there can be no doubt that a settlement arrived at on a dissolution might vest the immovable properties of the partnership in the former partners in proportions very different from the interests held by them during the subsistence of the partnership. Section 253(1) of the Contract Act provides that the share of each partner in the partnership property is the value of his original contribution increased or diminished by his share of profit or loss. It would thus follow that while partners may be joint owners of the partnership property they need not necessarily be owners in equal shares. On a dissolution, when the partners, settle their affairs, they may either allot to one or other of them particular items in entirety or in varying shares not necessarily in the particular proportion of the share of each partner in the whole partnership property. There is much to be said in favour of the view taken in Samuvier v. Ramasubbier : AIR1931Mad580 that a question of registration may arise in such cases, though there is also authority to the contrary. If in the present case there was anything to suggest that the arrangement under Ex. A gave to the various partners shares in immovable property different from the shares which they held prior to the dissolution, the question of registration of Ex. A might have been a more serious difficulty in the plaintiff's way. But there has been no suggestion anywhere that during the partnership stage the partners were not entitled to equal shares and if all that happened at the time of Ex. A was that their respective rights and liabilities were fixed in particular ways as regards the movable assets and that as regards the immovable property they continued to hold the same shares in them as they had prior to the dissolution, I do not feel that I am bound to reject Ex. A on the ground on non-registration. Under Section 45 of the Transfer of Property Act, the presumption in the case of co-owners, in the absence of evidence to the contrary, is that they held the property in equal shares and that is just what Ex. A provides for. It is on this narrow ground that I have come to the conclusion that Ex. A is not inadmissible on the ground of want of registration.
8. I accordingly allow the second appeal and setting aside the decree of the lower appellate Court restore the decree of the District Munsiff with costs here and in the lower appellate Court, payable by the first defendant.
9. Leave granted.