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M.M. Valliammai Achi and ors. Vs. Kn. Pl. V. Ramanathan Chettiar and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 1749 of 1962
Judge
Reported inAIR1969Mad257
ActsCode of Civil Procedure (CPC) , 1908 - Sections 100; Partnership Act, 1932 - Sections 6, 39, 46, 47 and 48; Evidence Act, 1872 - Sections 17 and 18; Limitation Act, 1908 - Schedule - Article 106; Trusts Act, 1882 - Sections 88; Contract Act, 1872 - Sections 171; Limitation (Amendment) Act, 1963 - Article 5
AppellantM.M. Valliammai Achi and ors.
RespondentKn. Pl. V. Ramanathan Chettiar and ors.
Appellant AdvocateK.S. Desikan, ;N. Srivatsamani and ;K. Raman, Advs.
Respondent AdvocateR. Gopalaswami Iyengar, ;M. Srinivasan and ;K.N. Balasubramanian, Advs.
DispositionAppeal allowed
Cases ReferredIn Peeran Sahib v. Jamaluddin Sahib
Excerpt:
partnership act (ix of 1932) and limitation act (ix of 1908), article 106--suit for accounts of dissolved partnership barred by limitation --whether assets of dissolved firm being immovable properties make any difference--make no difference at all--if remedy for accounts gets barred, claim for partition of immovable properties belonging to dissolved firm also gets barred ; the question for consideration was when a suit for accounts of the dissolved partnership is barred by limitation whether the fact that the suit properties, though assets of the dissolved firm, are immovable properties, makes a difference and entitles the plaintiffs (the heirs of a deceased partner of the firm) to their share in the properties.; held, that it is now settled law that a partner's or his representative's.....1. the above second appeal arises out of a suit for partnership accounts and a half share in the immovable properties described in the plaint schedule. the defendants who opposed the action having succeeded in the trial court but tailed with respect to the immovable properties on appeal, have preferred the second appeal.one valliappa chettiar, father of the plaintiffs, kuppan chettiar, father of the 12th defendant, and meyyappa chettiar, the deceased husband of the 1st defendant and father of defendants 2 to 11, were doing money lending business from 11-11-1921 in perambalur under the name and style of 'pl. m. valliappa chettiar, valliappa chettiar was entitled to a half share and the other two partners, kuppan chettiar and meyyappa chettiar, were each entitled to a quarter share. the.....
Judgment:
1. The above second appeal arises out of a suit for partnership accounts and a half share in the immovable properties described in the plaint schedule. The defendants who opposed the action having succeeded in the trial Court but tailed with respect to the immovable properties on appeal, have preferred the second appeal.

One Valliappa Chettiar, father of the plaintiffs, Kuppan Chettiar, father of the 12th defendant, and Meyyappa Chettiar, the deceased husband of the 1st defendant and father of defendants 2 to 11, were doing money lending business from 11-11-1921 in Perambalur under the name and style of 'PL. M. Valliappa Chettiar, Valliappa Chettiar was entitled to a half share and the other two partners, Kuppan Chettiar and Meyyappa Chettiar, were each entitled to a quarter share. The suit properties were acquired for the moneys due to the partnership under Ex, A-3 in 1924 and formed assets of the partnership. To this extent the facts were admitted.

Valliappa Chettiar died in March 1933 and Kuppan Chettiar, in 1947. According to the plaintiffs who are joined in their case by the 12th defendant in the action, on the death of Valliappa Chettiar, the partnership was reconstituted, the plaintiff taking the place of the father Valliappa Chettiar. Similarly on the death of Kuppan Chettiar in 1947, the partnership was again re-constituted, the 12th defendant stepping into the place of his father. The suit for accounts of the partnership was instituted by the plaintiffs in June 1959, within three years after the death of Meyyappa Chettiar in December 1956. It is the further case of the plaintiffs and the 12th defendant, that on re-constitution of the firm after the death of Valliappa Chettiar, the suit immoveable properties were withdrawn from the partnership and agreed to be enjoyed by the plaintiffs and the two surviving partners as co-owners. On this basis a share in the suit properties was claimed and rendition of accounts of the dissolved partnership was also prayed for.

2. The first defendant and her children, defendants 2 to 11, denied re-constitution of the partnership and withdrawal of the suit properties from the partnership. It was said in defence that on the dissolution, the partnership was wound up by the surviving partners and in discharge of the debt due to one Muthuraman Chettiar the suit properties were Bold on 1-2-1935 for a consideration of Rs. 4,000/-. Muthuraman Chettiar owed a sum of Rs. 3,500/- to his sister, the first defendant, towards her Stridhana according to the family custom, and this amount had been deposited with the firm. Subsequently Muthuraman Chettiar sold the properties by his power of attorney agent who was none other than Meyyappa Chettiar to the first defendant under Ex. B-6 on 17-4-1950. The 13th defendant in the suit, a contesting defendant, purchased the properties from the first defendant under Ex. B-7 on 10-11-1958 for a consideration of Rs. 10,500/-. The contesting defendants repudiated the case of the plaintiffs that the deposit, sale and subsequent transactions were all sham and nominal. Maintaining the validity of the sale and its binding nature, it was also pointed out that the suit was barred by limitation. The further case of the contesting defendants was that the partnership was dissolved on the death of Valliappa Chettiar, that there was no re-constitution, and that the accounts of the partnership were settled in December 1933. The sale having been effected in 1935, it is said that there was also adverse possession with reference to the suit properties.

3. The learned Subordinate Judge, Tiruchirapalli, accepted the defence put forward. He found that the suit partnership firm which was dissolved in March 1933 was not re-constituted and continued. He held that the sale under Ex, B-9 was a valid document binding on the partnership having been for a debt due by the partnership to the vendee. The subsequent transfer in favour of the 1st defendant was also held to be justified and proper. The sale in favour of the 13th defendant was found to be fully supported by consideration. The claim of the plaintiffs that the suit properties were withdrawn from the partnership was found against and it was held that the properties had been sold in the course of winding up of the business. The plea of adverse possession and enjoyment of the properties by the vendees under Exs. B-6, B-9 and B-7 was upheld, finding that the claim for accounts was barred, the suit for a share of the assets of the firm was held barred by limitation under Article 106 of the Limitation Act. In the circumstances, the suit was dismissed in its entirety.

4. There was an appeal by the plaintiffs, as also Memo of Cross-objections by the 12th defendant who paid court-fee claiming his 1/4th share in the suit properties.

With reference to the case of the plaintiffs and the 12th defendant as to re-constitution of the partnership and their claim that accounts of the partnership were not settled, the learned District Judge set before himself the following four points for consideration:

"1. Whether after the death of the plaintiffs' father, the partnership was reconstituted composing of plaintiffs, Meyyappa Chettiar and Kuppan Chettiar as partners?

2. Whether, after the death of Kuppan Chettiar, the partnership was again re-constituted composing of the plaintiffs, Meyyappa Chettiar and the 12th defendant as partners?

3. Whether the accounts of the partnership were settled on 18-12-1933 as contended by the 1st defendant? And

4. Whether the claim for accounting is in time, if there was no re-constitution of the partnership as alleged by the plaintiffs?"

On these four points the learned District Judge, on an evaluation of the evidence, held that the partnership stood dissolved in March 1933 on the death of Valliappa Chettiar that it was not re-constituted either in 1933-34 or 1947, and that the accounts of the dissolved partnership were not settled at any time.

On the question of limitation, he found that under Article 106 of the Limitation Act the suit for accounts of the dissolved partnership filed more than 12 years after dissolution was barred by limitation. It was not found that the suit properties had been withdrawn from the partnership.

He disagreed with the finding of the learned Subordinate Judge as to the validity of the sale of the suit properties. He held that the alleged deposit with the firm by Muthuraman Chettiar was not true, and that the sale under Ex. B-9 was not bona fide but was a fraudulent transaction to defeat the rights of the other co-owners. The plea of adverse possession set up by the contesting defendants was found against.

On the question of limitation as re-yards a share in properties the learned District Judge was of the view that though as pointed out by the Judicial Committee in Gopala Chetty v. Vijaya Raghavachariar, ILR 45 Mad 378= (AIR 1922 PC 115) if the remedy for accounts is barred a suit for a share of the assets is also barred, different considerations would arise as regards the claim for partition of immoveable properties that belonged to a dissolved partnership. in the learned District Judge's view, with reference to immoveable properties the surviving partners and legal representatives of a deceased partner become co-owners on dissolution and that therefore there could be no question of limitation in the present case reality of the sale having been found against. In this view, the appeal was allowed with reference to the claim for share in the immoveable properties. The plaintiffs were held entitled to a half share, and the 12th defendant, to a quarter share. Mesne profits for six years prior to the suit were decreed in favour of the plaintiffs. The 12th defendant was awarded only future mesne profits. The 13th defendant was given the remaining 1/4th in the properties.

The 12th defendant subsequently applied to the District Judge for review of the judgment and decree praying for past mesne profits also and against the order allowing the review the contesting defendants have preferred C. M. A. No. 43 of 1963. In the second appeal the contesting defendants question the correctness of the decision of the lower Appellate Court and attack particularly its view on the question of limitation that there is a distinction between immoveable properties and other assets of the dissolved partnership. The plaintiffs have preferred memo of cross-objections from the rejection of their claim to accounts. The 12th defendant has also preferred memo of cross-objections, but that relates to the past mesne profits which he has since been able to secure by way of review.

5. The finding that there was no re-constitution of the firm which got dissolved with the death of Valliappa Chettiar in March 1933 and the finding that there was no settlement of accounts of the firm at any time are findings of fact which as they stand are unimpeachable in second appeal. Quite properly, counsel for the respondents does not canvass the correctness of these findings before me in support of the decree.

6. The appellants in second appeal however attack the finding as to the invalidity of the sale evidenced by Ex. B-9. It was submitted that certain essential features which the learned District Judge himself had noticed while considering the other aspects of the case have been ignored by the learned District Judge on this part of the case. It was also urged that the burden has been wrongly thrown on the contesting defendants to establish the truth and validity of the sale.

The learned District Judge finds against the truth of the deposit of Rs. 3,500/-. There is an entry in the books of account of the firm made on 26-8-1932 reciting that according to a letter a sum of Rs. 3,500/- was deposited by Muthuraman Chettiar. The learned District Judge finds that this entry was made behind the back of Valliappa Chettiar after he fell ill. It is submitted for the appellants that the entry was admittedly found in the account book of the partnership. About the time Valliappa Chettiar died, the first plaintiff (his son) was about 24 years old. It is the admission of P. Ws. 1 and 3 that the first plaintiff after the death of Valliappa Chettiar handed over the account books of the suit partnership, Exs. B-1 and B-2, to Meyyappa Chettiar, the first defendant's husband. There is evidence that the first plaintiff after the death of his father conveyed certain properties belonging to the suit partnership to one Kasthuri Naidu and for recovery of the properties the surviving partners had to institute a suit which was ultimately compromised. The learned District Judge notices that misunderstandings arose between the plaintiffs on the one hand and the surviving partners on the other soon after the death of the plaintiff's father. The first plaintiff had claimed exclusive title to the partnership in denial of the shares of Kuppan Chettiar and Meyyappan Chettiar. The suit O. S. No. 362 of 1935 ended only in December 1935. It is long prior to this that the sale in favour of Muthurarnan Chettiar had taken place in February 1935. For coming to the conclusion that re-constitution of the partnership pleaded by the plaintiffs was untrue, the learned District Judge observed:

"It is the categorical admission of the two plaintiffs in their evidence that they were in great financial strain ever since the death of their father. But curiously at no time in the course of about a quarter of century they made any demand for payment of their share of the income."

The learned District Judge also concludes that the partnership did not appear to have been run on profitable lines and that was perhaps the reason why neither the plaintiffs nor the 12th defendant took any step to get the accounts settled and to take their shares. It is in this background that learned Counsel for the appellants submits that the reasoning of the learned Subordinate Judge for upholding the truth of the deposit and the sale that followed must be considered.

The learned District Judge would not accept the entry in the partnership account book, remarking that about six months prior to his death Valliappa Chettiar who was in management of the partnership left Perambalur and the entry must have been made behind his back. It is remarked by the learned District Judge that the contesting defendants have not examined Sellamuthu Goundan to prove the truth about the deposit. Sellamuthu Goundan was the Kariasthan of the firm. It was conceded by P. W. 2 that the entry regarding the deposit of Rs. 3,500/- was in the handwriting of this Sellamuthu Goundan. It is submitted that in the present case none of the partners were alive and all the opposing parties were legal representatives of the deceased partners. While entries made by one partner without the knowledge of the other would not prejudice the latter as between himself and his co-owners, it has been repeatedly pointed out that as regards partnership books these being accessible to all the partners and being kept under the surveillance of them all, they are prima facie evidence against each of them and therefore also for any of them against the others. The failure of the learned District Judge to bear in mind these special features of this case, it is submitted, vitiates his findings. The submission is not without force; but in the view I take on the question of limitation, it is unnecessary to examine the matter further.

6-A. On the findings as they stand the partnership in question was dissolved in March 1933 with the death of Valliappa Chettiar. There was no settlement of accounts. The suit immoveable properties were not separated from the assets of the partnership by any agreement between the partners. The sale of the suit properties was not a bona fide one but a fraudulent transaction. The learned District Judge would go further and hold that even if the deposit alleged by the contesting defendants was conceded, Meyyappa Chettiar was not competent to sell away the shares of the plaintiffs and Kuppan Chettiar. This may not be a correct proposition of law, as the surviving partners in the course of winding up can sell the assets of the firm. Section 47 of the Indian Partnership Act continues the authority of partners for the purpose of winding up, and the authority of a partner under that section to do all things necessary for the purpose of winding up the affairs of the firm also includes the rights to sell the partnership property. The suit for accounts of the dissolved partnership is hopelessly barred by limitation and this is not a case where any claim is made or can be sustained as for profits earned by the utilisation of the deceased partner's interest in a business continued after his death. The only question for consideration is whether the fact that the suit properties, though assets of the dissolved firm, are immovable properties, makes a difference and entitles the plaintiffs to their share in the properties.

7. Learned Counsel for the appellants submits that the distinction which the learned District Judge has made that different considerations arise as regards the claim for partition of immovable properties of a dissolved firm is wholly untenable and opposed to law. Learned Counsel points out that the question, as it stands to say, is beyond the pale of forensic controversy. If a suit for accounts is barred, equally a suit for a share in the properties of a dissolved firm -- be they immoveable or other properties, is barred. It is urged that the partnership law makes no distinction in the matter of taking of accounts on dissolution between immoveable properties and other properties,

8. It is now settled law that a partner's or his representative's lien with reference to partnership assets is on the surplus of the assets of the firm and not on any particular item of property belonging to the partnership. On the dissolution of a firm, all the properties belonging to the partnership have to be sold and the sale proceeds after discharging all the partnership debts liabilities, have to be divided among the partners according to their respective shares, and this is the general rule. The lien of a partner is not one on any specific assets of the partnership existing on the death of a partner such as would fetter its conversion into money. The right of a representative of a partner is really a claim against the surplus assets on realisation -- whether the surplus assets consist entirely of the proceeds of realisation or whether they include some specific items of property which existed on the death of the partner. The proper remedy of a partner in the circumstances is to have accounts taken to ascertain his share and if the right to sue for accounts is barred by limitation, the partner cannot sue any partner in possession of the assets for a share therein. If after taking accounts and discharging the mutual rights and obligations of the partners or their representatives an asset which has been forgotten or treated as valueless afterwards falls in, that asset no doubt will be divided between the partners or their representatives in proportion to their shares in the partnership.

The head-note in ILR 45 Mad 378= (AIR 1922 PC 115), the leading case on the subject, which succinctly states the principle, runs thus:

"If a partnership has been dissolved and accounts have been wound up, the mutual rights and obligations of the partners therein being discharged, and an asset which has been forgotten or treated as valueless afterwards falls in, it ought to be divided between the partners in proportion to their shares in the partnership. But if no account has been taken, the proper remedy of a partner hi respect of an asset so received is to have an account taken; if his right to sue for an account is barred by limitation, he cannot sue the partner who has received the asset for a share of it."

I may here refer to the decision of a Full Bench of this Court in Rajagopala Chettiar v. Palani Chettiar, (FB) where the question arose whether a suit for contribution by a partner who had paid more than his share of a decree jointly and severally passed against the partners would lie, if a suit for accounts of the partnership itself had become barred. Pointing out that there was no difference in principle between a plaintiff's claim to a share of the assets and a suit for contribution towards the liabilities discharged by the plaintiff in excess of his share, it was held that in the case of dissolved partnership the only right of a partner was to have the accounts taken and if that right was barred by the law of limitation he could have no right to claim any sum which would be an item in such a suit for accounts.

If this rule is applied, and that was so done by the trial Court, there is no question that the present claim for a share in the suit immoveable properties id barred by limitation. The suit properties are admittedly assets of the partnership and there has been no settlement of accounts whatsoever. They are not assets which have been realised subsequent to the taking of accounts. Their Lordships of the Judicial Committee in ILR 45 Mad 378 at pp. 390 and 394=(AIR 1922 PC 115 at pp. 119 and 120), observed:

"If on the other hand no accounts have been taken and there is no constant that the partners have squared up then the proper remedy when such an item falls in is to have the accounts of the partnership taken; and if it is too late to have recourse to that remedy, then it is also too late to claim a share in an item as part of the partnership assets, and the plaintiff does not prove, and cannot prove that upon the due taking of the accounts he would be entitled to that share."

In the present case the plaintiffs seek to prove that these items of assets are available for division between the partners. Their Lordships in the case above cited also observed;

"The very items for which the respondent is now suing were actually items which would have come into the account on his claim against the appellants for a partnership account in the suit in which he failed."

That would have been so in the present case also. The reason for this rule stated by the Judicial Committee is that it might well be the case that one of the reasons why no final balancing of accounts took place was that A owed the partnership so much money that it was anticipated that B would hereafter receive a particular item which would operate substantially to balance the claim.

In the present case a share in the items is claimed a quarter century after the death of a partner. The plaintiffs were adult representatives of the deceased partner at the death and disputes about assets of the partnership had even then been raised in a manner. The properties had been dealt with by a surviving partner as in the course of winding up -- ignoring for the moment the finding in that regard. One of the surviving partners died 12 years thereafter. In spite of this lapse of time, no share was claimed in the properties. The accounts do show a credit in favour of one Muthuraman Chettiar to whom the property was conveyed. The contesting defendants according to the Court below have not established the truth and validity of the same. It cannot be said what the finding would have been if accounts had been taken and balanced shortly after the dissolution, when two of the partners were alive. The silence for nearly quarter of a century is therefore significant.

Learned Counsel for the plaintiffs, Mr. R. Gopalaswami Aiyangar, did not seek to sustain before me the distinction the learned District Judge has made between immoveable assets and other assets of a dissolved firm, as he cannot in view of the well established legal proposition.

In English Law where the distinction is between real and personal property the position is stated thus in Lindley on Partnership, 12th Edition, at page 378:

"From the principle that a share of a partner is nothing more than his proportion of the partnership assets after they have been turned into money and applied in liquidation of the partnership debts, it necessarily follows that in equity, a share in a partnership whether its property consists of land or not, must, as between the real and personal representatives of a deceased partner, be deemed to be personal and not real estate, unless indeed such conversion is inconsistent with the agreement between the parties."

The Supreme Court quotes this passage with approval in Narayanappa V. Bhaskara Krishnappa, , where the Court had to consider whether a document evidencing relinquishment of interest of the partners in partnership assets which consisted also of immoveables was compulsorily registrable under Section 17(1) of the Registration Act Their Lordships of the Supreme Court held that the interest of the partners in partnership assets was moveable property, and that the document evidencing relinquishment of that interest was not compulsorily registrable. After referring to the relevant section of the Partnership Act it is observed:

"From a perusal of these provisions it would be abundantly clear that whatever may be the character of the property which is brought in by the partners when the partnership is formed or which may be acquired in the course of the business of the partnership it becomes the property of the firm and what a partner is entitled to is his share of profits, if any, accruing to the partnership from the realisation of this property, and upon dissolution of the partnership to a share in the money representing the value of the property."

Quoting from Lindley it is said:

"What is meant by the share of a partner is his proportion of the partnership assets after they have been all realised and converted into money, and all the partnership debts and liabilities have been paid and discharged. This it is, and this only which on the death of a partner passes to his representatives, or to a legatee of his share ..... and which on his bankruptcy passes to his trustee."

Clearly the above extracts indubitably establish that the character of any particular asset of the partnership, has little to do in ascertaining the share to which a partner or his representative may be entitled in the property of the firm on dissolution. There is a direct decision of this Court on this question in Sundarsanam Maistri v. Narasimhulu Maistri, (1902) ILR 25 Mad 149 at PP. 165, 166 where it is said:

"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. .....

If the plaintiffs 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."

In that case the plaintiff sued for a share in the partnership which admittedly was possessed of immoveable property. It was argued that in respect of immoveable property the suit would be in time, although as a suit for dissolution of partnership it was barred by limitation. It was held that the only suit which could be brought was for winding up of the partnership business and for distribution of the properties and not a suit for partition of the partnership properties. On that basis the suit was held barred by limitation. This decision and Venkata Ratnam v. Subba Rao, ILR 49 Mad 738=(AIR 1926 Mad 1010) which relied on it, find approval by the Supreme Court in . Reference may also be made to Gobardhan v. Ganesh Lal, (1911) 11 Ind Cas 288 where it was held that a suit for division of immoveable property forming Part of partnership assets after the dissolution of partnership is governed by Article 106 of the Limitation Act. The decision in Ismail v. Tayaballi, AIR 1929 Sind 182 which has followed Sundarsanam Maistri v. Narasimhulu Maistri,(1902) ILR 25 Mad 149 and the one in Niaz Ahmad v. Abdul Hamid, (1908) ILR 30 All 279 may also be cited here.

9. The stand taken by the appellants on the question of limitation thus being impregnable, learned Counsel for the plaintiffs, Mr. R. Gopalaswami Aiyengar would submit that Article 106 of the Limitation Act had no application to a suit by the legal representatives of a deceased partner.

Learned Counsel submitted that the surviving partners stood in a fiduciary capacity in relation to the representatives of a deceased partner, and that the right of the representatives being only to the deceased partner's share in the surplus assets, limitation would not run against them till accounts have been taken and surplus ascertained or accounting was demanded and refused even if no steps were taken to settle the accounts for decades rather a startling submission having regard to the catena of decisions on the question.

On the findings of the Courts below Section 37 of the Partnership Act has no application whatsoever. The assets of the old partnership were not embarked upon by the surviving partners in new partnerships in succession for the cause of action to arise on the death of Meyyappa Chettiar in 1956. The right declared under Section 46 of the Partnership Act enures both to the partner of a dissolved firm and his representatives. The question has been decided by the Judicial Committee even in 1923 in Mussammat Jatti v. Banwari Lal, ILR 4 Lah 350=(AIR 1923 PC 136). It is sufficient to set out the head-note:

"When a member of a partnership firm dies there is a dissolution of the firm and his widow is barred by the Indian Limitation Act, 1908, Schedule I Article 106. from suing for an account more than three years after his death, in the absence of proof of an agreement whereby she became a partner in his place: the fact that the deceased partner's share continued to be dealt with in the partnership books is no evidence of such an agreement."

In She present case the plaintiffs and the 12th defendant have failed in their case that by a subsequent agreement the partnership was continued with the representatives of the deceased partners The suit must therefore have been instituted within three years after the death of Valliappa Chettiar in 1933. But the suit was instituted only in 1959.

Even earlier this Court applied the three year period of limitation to a suit by representatives of a deceased partner in Ahinsa Bibi v. Abdul Kader Saheb, (1902) ILR 25 Mad 26. Article 106 of the Limitation Act of 1877 which came up for consideration in that case corresponds to Article 106 of the Limitation Act, 1908, applicable to the present case. In that case five persons commenced partnership and one of them died in 1890. No accounts were taken; nor were the representatives of the deceased partner taken into the partnership. The surviving partners continued to carry on the business and in 1891 one of the surviving partners died. Even then no accounts were taken; nor were the representatives of the second deceased partner taken into the partnership. The other surviving partners continued the business. In 1898 the legal representatives of the second deceased partner instituted a suit against the surviving partners and the representatives of the other deceased partner for an account and for a share of the profits of the partnership which was formed in 1890, on the death of the predecessor of the plaintiffs. The third plaintiff to the suit was a minor at the death of the partner in 1891 and on the date of the suit.

On the question of limitation raised, this Court held that the suit by the representatives of the partner who died in 1891 was really one for an account and a share of the profits of the partnership which was dissolved by the death in 1891, and that the Article applicable was Article 106 of the Limitation Act. However the bar of limitation in that case was saved by the application of Sections 7 and 8 of the Limitation Act as the third plaintiff was a minor when the cause of action arose and continued to be a minor when the suit was filed.

In Gopi Nath v. Satish Chandra, it is pointed out

that the fiduciary relationship between the surviving partners and representatives of a deceased partner as regards his interest in the partnership property which gets statutory recognition under Section 88 of the Trusts Act does not alter the nature of the suit as one filed under Article 106 of the Limitation Act, if for ascertaining the profits of the dissolved partnership an account has to be taken or rendition of accounts by the partners is called for. It is held in that case that Article 106 of the Limitation Act governs a suit by a representative of a deceased partner against the surviving partners who hold the assets in a fiduciary capacity.

10. For the respondent the decision in Nilmadhab Nandi v. Nirada Sundari Dasi, (1941) 45 Cal WN 1065 at p. 1066 was cited and the following passage therein was relied upon:

"A suit brought on the death of a partner by his legal representatives 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, Limitation Act, but is a right accruing to him by the subsequent dealings with the assets belonging to the deceased partner."

The principle enunciated above can have no application to the facts of the present case. The reference was to a case where the business was continued and profits were being made by the use of the assets of the deceased partner in the dissolved partnership. The distinction is pointed out in Nagaranjan v. Robert Hotz, where

(1902) ILR 25 Mad 26 is referred to and relied on. In that case it was held that a suit for rendition of accounts by the legal representative of the deceased partner for the period between the coming into force of the partnership and its dissolution by the death of the partner was governed by Article 106, the suit being clearly one for rendition of partnership accounts. But it was said that a suit for rendition of accounts by the legal representatives of a deceased partner for the period after the death and dissolution of the partnership was not governed by Article 106, as the cause of action continued from day to day as long as the business was continued and the firm made profits utilising the deceased partner's assets in the business.

In Peeran Sahib v. Jamaluddin Sahib, AIR 1958 Andh Pra 48 the Andhra Pradesh High Court had to consider Section 37 of the Partnership Act and Articles 106 and 120 of the Limitation Act. Subba Rao, C. J. (as he then was of the Andhra Pradesh High Court) delivering the judgment for the Division Bench, referred to the decision of the Judicial Committee in ILR 4 Lah 350=(AIR 1923 PC 136) and that of this Court in (1902) ILR 25 Mad 26, overruled the applicability of residuary Article 120, and held that a suit by the heirs or legal representatives of a deceased partner for accounts and a share of profit would be governed by Article 106 of the Limitation Act, and that time would commence to run from the date of death of the partner on which date the partnership must he deemed to be dissolved in the absence of any agreement for taking in, the legal representatives of the deceased partner as partners. It is unnecessary to multiply cases, as the law appears to be well settled. They can be seen collected in Mitra's Law of Limitation and Prescription, 8th Edition, at page 541, under Article 5 of the Limitation Act of 1963 which is in identical terms with Article 106 of Limitation Act 1908.

11. The decree and judgment of the learned District Judge have therefore to be and are hereby set aside. The decree and judgment of the learned Subordinate Judge dismissing the suit with costs are restored. The second appeal is accordingly allowed, the two Memoranda of Cross-objections as well as the C. M. A. consequently fail and are dismissed without costs. The parties will bear their respective costs in the lower appellate Court. The appellants are entitled to their costs in this Court, against the contesting respondents that is the 1st plaintiff, and the 2nd plaintiff and the 12th defendant represented by their legal representatives.

12. Leave refused.


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