1. The appeal and the cross-objections are against the final decree in a suit for dissolution of partnership and taking of accounts. The partnership business was carried on in a town in Indonesia under the name and style of M.C. Firm. Chinniah Chetti, whose adopted son has filed the suit, had an 11 anna share in the said business. The first defendant in the suit is the widow of the said Chinniah Chetti. The third defendant is the daughter-in-law of Chinniah Chetti and the first defendant through another pre-deceased adopted son. The second defendant Sivalingam Chetti had a 5 anna share in the said firm.
2. The plaintiff's suit for dissolution of the partnership and for taking of accounts was filed on 29-6-1950. The second defendant raised various contentions, one such contention being that the accounts of the firm had been settled and that there was no case for dissolution of the firm and taking of accounts. It is common ground that the business of the firm had come to an end even in 1948. But, according to the plaintiff, there was no final settlement of account. It was also his case that the funds of the suit firm (M.C. firm) had been diverted to another firm called V.S.V. firm which was run as a partnership between the second defendant and others. The prayer was that the profits from the said firm should also be brought in on the ground that only from out of the moneys diverted from M.C. firm the business of V.S.V. firm was carried on.
3. The preliminary decree in the suit, as modified by this court on appeal, is one for dissolution of the partnership firm, viz., the said M.C. firm, and taking of accounts inclusive of the profits from V.S.V. firm. This court also held in favour of the plaintiff on the question whether the moneys had been further diverted to certain other firms. The decision of this court was that in respect of such moneys that were found to have been so diverted to other firms, the second defendant should be directed to bring back the amount with interest.
4. In pursuance of the preliminary decree, a Commissioner appointed by the court below went into the accounts and submitted his report. The trial court passed a final decree. The plaintiff and the second defendant were not satisfied with the final decree passed by the trial court and both filed appeals against the same. The first appellate court, on a review of the entire matter, held that the second defendant shall pay in India 6,612.80 Gs (Indonesian currency) and costs thereon inclusive of the Commissioner's fee, with interest on the decree amount at six per cent. per annum from 6-1-1961 till date of payment. As against this decree, the plaintiff has filed this second appeal. The second defendant has filed the cross-objections.
5. As far as the appeal by the plaintiff is concerned, four points were raised. The first point was that as per the direction of the modified preliminary decree granted by this court, the second defendant was bound to bring in even the profits earned in a third firm called K.R.S.V.L. firm and not merely money diverted from the suit firm with interest thereon. This contention has not been countenanced by the courts below, quite rightly. This court, while modifying the preliminary decree, has stated that the second defendant was liable to account only for the profits of the M.C. firm and V.S.V. firm and not in respect of the profits of any other firm. All that was said was that the money divested from the suit firm should be brought back with interest and that has been done. Therefore, the plaintiff cannot have any case on that point.
6. The second point raised is that in the accounts there are certain debits regarding the payment of income-tax and that those debits have not been properly entered. The courts below have negatived the contention of the plaintiff in this regard. The finding is one of fact and there is no scope for interference.
7. The third contention is in respect of what is called the Thocko business carried on by the second defendant with the funds of the firm. The courts have found a particular amount as the profit earned by the said Thacko business. The contention of the plaintiff is that only that profits from the business carried on for 33 days have been accounted for and that the further amounts have not been accounted. This has also been considered by the courts below and negatived. Being a question of fact, there is no scope for interference on this point either.
8. The only other point raised on behalf of the plaintiff is regarding the relevant date on which the exchange rate between the Indonesian currency and the Indian currency is to be worked out. According to the plaintiff, the exchange rate should be as on 31-12-1948, the date on which the accounts had been closed and the business wound up. But according to the second defendant, the exchange rate should be as on the date on which the Commissioner appointed by the trial Court ascertained the amount due from one party to the other.
9. In Di Ferdinando v. Simon, Smits and Co., 1920-2 KB 704, it has been held that in arriving at the proper equivalent, the rate of exchange prevailing between the two countries when the liability arose and not that prevailing at the date of the judgment, should be adopted. This has been followed in Muthiah Chetty v. Veerappa Chetti, AIR 1929 Mad 627. But, the contention on behalf of the second defendant is that the decision of the English Court is in the case of a breach of contract and that in the present case, which is one for dissolution of partnership and taking of accounts, the relevant date for determining the exchange rate s the date of winding up of the firm as contemplated in S. 46 of the Indian Partnership Act. It is stated that only when the Commissioner determines the rights of parties winding up terminated and therefore that is the relevant date. In this connection, certain observations of this court in the case referred to above are relied on. At page 632, columns 1 and 2, this court observed--
'The plaintiff's share was certainly ascertainable by 6th December 1920 when the winding up was completed and the accounts were ready according to defendant 1's own statement and if the plaintiff was willing to accept the amount he could have taken the amount that might be ascertained as the proper amount due on that date. It is true that this need not be the amount which the defendants were willing to offer. But still the assets of the partnership may be held to have crystallised on that date and the only question remaining for the court would be to decide the difference between the parties. It is impossible to accept any date earlier than 6th December, 1920, because the winding up was not completed, and not until after the partnership assets are all realised, and converted into money can the share of a partner be settled: Vide Lindley p. 427.'
I am quite clear that the winding up referred to in the above passage is not the one as contended for by the learned counsel for the second defendant. It is to be noted that in the reported case the suit for dissolution of partnership and taking of accounts had been filed only on 20-1-1922. However, the court held that the business had been wound up even on 6-12-1920, because of the facts and circumstances of that case. Therefore, it is not right that the winding up of the business referred to in that judgment can possibly take place only after the Commissioner ascertained the figures after going through the accounts. The facts and circumstances of the present case are almost similar to those in the reported case. Here also it is the admitted fact that the business of the partnership firm had been closed in 1948 and by that time all the assets had been realised. In the accounts the amounts due to the respective partners had also been struck. The case of the second defendant had been that there had been a final settlement of account even in 1948 and that therefore the suit for dissolution of partnership and taking of accounts did not lie. This case of the second defendant was, however, not accepted by the court while passing the preliminary decree. Even so, the fact remains that the business had in fact been wound up and the assets of the firm had been realised. As in the reported case, in the present case also, there were only certain differences between the parties, as to the amount due inter se to be decided. Under those circumstances. I am of the view that the relevant date for purposes of the exchange is 31-12-1948. To this extent the appeal has to be allowed.
10. Coming to the cross-objections, only two points are pressed. No. 1 is that the total amount of 6612.80 Gs (Indonesian currency) does not represent the principal amount, but principal and interest; that the principal was only 4092.80 Gs. and that therefore the court was not right in directing the payment of interest at 6 per cent. per annum over the entire 6000 add Gs. This contention is well founded. It is not disputed that the principal amount is only 4092.80 Gs. Therefore, the second defendant would be liable to pay interest at 6 per cent. per annum only on 4092.80 Gs. from 6-1-1961, the date of the final decree, till date of payment.
11. The second point is that the court below ought not to have directed the entire Commissioner's fee to be borne by the second defendant. As already seen, the first appellate court directed the second defendant to pay the plaintiff's costs inclusive of the Commissioner's fee. It must be remembered that the plaintiff, the first defendant and the third defendant who are the legal representatives of Chinniah Chetti, the 11/16 share of the Commissioner's fee. The second defendant as a 5 anna sharer is bound to bear only 5/16 of the Commissioner's fee. The decree of the first appellate court has to be modified in this respect also.
12. The result is that the second appeal and the memorandum of cross-objections are partly allowed as indicated above. I direct the parties to bear their respective costs in this court.
13. Order accordingly.