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K.A. Dawood Sahib Vs. V.A. Sheik Mohideen Sahib and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1938Mad5; (1937)2MLJ760
AppellantK.A. Dawood Sahib
RespondentV.A. Sheik Mohideen Sahib and anr.
Excerpt:
- - the plaintiff's father, however, was not satisfied with a division of profits on this basis, and on the 16th november, 1922, it was agreed between the plaintiff's father and the first defendant that the plaintiff's father should be deemed to have a share of 9 1/2 annas and the first defendant a share of 6 1/2 annas......in the constitution of the firm. in these circumstances the act contemplates that the rights and duties of the partners in the reconstituted; firm shall remain unchanged. there is no doubt that from 1922 up to the time of his death the plaintiff's father was entitled to a share of 9 1/2 annas, and we consider that in the circumstances of this case his son is entitled to a division onthe same basis.7. the appeal will therefore be dismissed with costs.
Judgment:

Alfred Henry Ltonel Leach, C.J.

1. This appeal arises out of a suit filed by the first respondent on the original side of this Court. The appellant was the first defendant. The suit was for the taking of the accounts of a partnership between the plaintiff and the first defendant.

2. It appears that the father of the plaintiff and the first defendant entered into partnership on the 14th April, 1920. On the 10th April, 1931, the plaintiff's father died, which meant in law the dissolution of the partnership. The partnership business was, however, carried on by the plaintiff (who took the place of his deceased father), and the first defendant. This partnership carried on business until 1933 when the first defendant gave notice to the plaintiff dissolving the partnership. When the original partnership was formed, that is, the partnership between the plaintiff's father and the first defendant, it was agreed that they should share equally in the profits. They had each contributed a sum of Rs. 250 towards the capital. The plaintiff's father, however, was not satisfied with a division of profits on this basis, and on the 16th November, 1922, it was agreed between the plaintiff's father and the first defendant that the plaintiff's father should be deemed to have a share of 9 1/2 annas and the first defendant a share of 6 1/2 annas. This, of course, meant sharing both the losses and profits in these proportions. At an early stage in the original partnership, partnership moneys were advanced on mortgage. Two sums were in fact so advanced on the same property--a sum of Rs. 2,500 and another of Rs. 1,900. The mortgagors were unable to redeem the mortgages and were eventually compelled to convey the mortgaged property to the two partners in consideration of the mortgage debt plus a small monetary payment. The learned trial Judge gave the decree asked for and held that the profits and losses should be shared between the plaintiff and the first defendant on the basis of 9 1/2 annas and 6 1/2 annas respectively and that they were entitled to share in these proportions the property which they had bought. The appeal is concerned with these findings.

3. The appellant says that in regard to the business subsequent to April, 1931, the account should be taken on the basis that the parties were entitled to share equally in the partnership profits and that the house property also should be divided on this basis. The learned Advocate for the appellant rightly abandoned the contention with regard to the house on having his attention drawn to the provisions of Section 48 of the Indian Partnership Act, and, therefore, it is only necessary to discuss whether he is entitled to succeed on the other point.

4. In the trial Court the plaintiff contended that he was Sahib entitled to have the accounts taken on the basis that he had a share of 9 1/2 annas on the ground that this had been expressly agreed. The first defendant similarly set up an express agreement to share equally. The learned Judge disbelieved the evidence of both the plaintiff and the first defendant and held that there was no express agreement at all. The parties had merely agreed to carry on the partnership business, the plaintiff taking the place of his deceased father and nothing being said about the shares. On this finding he held that the plaintiff was entitled to the share of his deceased father, and we consider that this decision is correct.

5. The learned Advocate for the appellant has relied on the provisions of Section 13 of the Indian Partnership Act. CI. (b) of that section states that the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm. But the provisions in this section are all governed by the opening words of the section which are, ' subject to contract between the partners '. If there was no agreement between the ''parties and a new partnership was formed the partnership would be governed by this section. But here we are dealing with a case where an established partnership business was continued on the same lines as before, after one of the partners had died, and Section 17 has application. That section says:

Subject to contract between the partners-

(a) where a change occurs in the constitution of a firm, the mutual rights y and duties of the partners in the reconstituted firm remain the same as they were immediately before the change, as far as may be;

(b) where a firm constituted for a fixed term continues to carry on business after the expiry of that term, the mutual rights and duties of the partners remain the same as they were before the expiry, so far as they may be consistent with the incidents of partnership at will; and

(c) where a firm constituted to carry out one or more adventures br undertakings carries out other adventures or undertakings, the mutual rights and duties of the partners in respect of the other adventures or undertakings, are the same as those in respect of the original adventures or undertakings.

6. There was no special contract between the parties when the plaintiff and the first defendant decided to continue the old business, but a change had occurred in the constitution of the firm. In these circumstances the Act contemplates that the rights and duties of the partners in the reconstituted; firm shall remain unchanged. There is no doubt that from 1922 up to the time of his death the plaintiff's father was entitled to a share of 9 1/2 annas, and we consider that in the circumstances of this case his son is entitled to a division onthe same basis.

7. The appeal will therefore be dismissed with costs.


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