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Rathan Chand Kumaji Vs. Amichand and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1934Mad665
AppellantRathan Chand Kumaji
RespondentAmichand and ors.
- undivided brother of jagarup and as such entitled to his share of the partnership assets. the present suit is framed in the alternative in view of what happened in a former suit, o.s. no. 62 of 1927 on the file of the city civil court. to elucidate the contentions raised before us, it is necessary to refer in some detail to the nature and course of that litigation. samrathmull, the present defendant 3, was the plaintiff therein and he sued his partners and the present plaintiff who was impleaded as defendant 3. the plaint prayed that the usual partnership accounts be taken; the total amount of profits earned in the business be ascertained and the amount due to the plaintiff for his share of the profits be also ascertained. 2. defendant 3, i.e., the present plaintiff, did not appear.....


1. Defendants 1 to 3, one Jagarupchand Kumaji and certain others were carrying on a partnership business which admittedly came to an end in October 1925, on the death of Jagarup. The plaintiff claims to be an undivided brother of Jagarup and as such entitled to his share of the partnership assets. The present suit is framed in the alternative in view of what happened in a former suit, O.S. No. 62 of 1927 on the file of the City Civil Court. To elucidate the contentions raised before us, it is necessary to refer in some detail to the nature and course of that litigation. Samrathmull, the present defendant 3, was the plaintiff therein and he sued his partners and the present plaintiff who was impleaded as defendant 3. The plaint prayed that the usual partnership accounts be taken; the total amount of profits earned in the business be ascertained and the amount due to the plaintiff for his share of the profits be also ascertained.

2. Defendant 3, i.e., the present plaintiff, did not appear and there was some contest only between Samarathmull and defendants 1 and 2 as to the quantum of the former's share and certain minor matters. These questions were adjusted by a 'raji' between them. The Court thereupon passed a preliminary decree directing accounts to be taken under the following heads : (1) An account of the credits, property and effects now belonging to the plaint partnership. (2) An account of the debts and liabilities of the said partnership. (3) An account of the profits and loss of the business of the partnership. The Commissioner in due course submitted a report to which plaintiff's counsel took objection that it did not determine the amounts due to the other partners in the firm. This objection was held to be valid as "those amounts must be specified in any final decree that may be passed." The Court accordingly referred the matter back to the Commissioner "requesting him to determine the amounts due to the various partners." In the amended report submitted by the Commissioner he stated that defendant 3 (present plaintiff) was entitled to Rs. 3,830-7-0 but he added that defendants 3, 4 and 6 in that suit had drawn further sums from the partnership firm subsequent to the close of the last partnership year. On receipt of this report, the Court passed judgment in the following terms:

The Commissioner has now submitted an amended report. Defendants accept the report; plaintiff filed objections to it but has withdrawn his objections.

3. One of the questions argued before us relates to the effect of this portion of the judgment. The judgment then proceeds to say that there will be a declaration as prayed for in the plaint and a decree for Es, 1,380-14-1 in favour of the then plaintiff and against defendants 1 and 2 who were in possession of the assets of the firm. As the present plaintiff did not appear in the suit, he did not appear before the Commissioner or at the final judgment. It is admitted that on the above report of the Commissioner defendant 3 in that suit could, if ho so chose, have asked for a decree in his favour for the amount that may be found payable to him as representing his brother's share of the partnership assets. Unfortunately he did not do so. We cannot agree with the learned City Civil Judge that because the present plaintiff did not appear before the Commissioner or before the Court, he would not be bound by the result of the accounts taken by the Commissioner and accepted by the Court; nor can we concur in his further inference that the present plaintiff cannot claim to take advantage of what happened in that suit. He was certainly a party defendant to the action though ex parte and it has not been disputed that so far as it was necessary to take the accounts in that case for the purpose of giving a decree to the plaintiff for the amount found payable to him, the accounts-taking will be binding upon all the parties whether they appeared or not. It must also be remembered that the accounts of a partnership can only be taken and must be taken once for all in a suit to which all the partners or their representatives are parties, and the law does not contemplate successive suits for accounts-taking at the instance of the various partners. Indeed this is one of the very objections taken by defendant 1 in his written statement.

4. It has been conceded before us that the second prayer in the present plaint, viz., for taking the accounts of the dissolved partnership can be successfully met by the plea of limitation. The question for consideration therefore is, whether this plaintiff who has not availed himself of the opportunity which he had in the former suit to ask for a decree in his favour, can now sue for the amount which, as per the accounts then taken, the Commissioner found he would be entitled to. It is contended for the appellant that the claim now made is analogous to one arising out of an adjustment of partnership accounts as between the partners and reliance is placed on Jalim Singh v. Shunee Lal (1911) 11 I.C. 540. We are unable to accept this as a true analogy because where there is such adjustment, the subsequent; claim rests upon a fresh contract between the partners. It is next argued that this is a claim for an amount found due to defendant 3 in the former judgment but not embodied in a decree and the decision reported in Ramaswami v. Muthayya Chetty 1925 Mad. 279 was called in aid; but that case does not carry the appellant to the length required by the facts of this case. It is true that where a former suit ended in a declaratory judgment and the decree was not framed in an executable form, a suit will lie to enforce the rights so declared and such a suit will be governed by Article 122, Lim. Act. In the case in Ramaswami v. Muthayya Chetty 1925 Mad. 279 the decree itself declared the right to a specified amount and the subsequent suit was instituted for the recovery of that amount. Similarly in the case in Henley v. Soper the Elder 108 E.R. 949, the suit in England was laid to recover a specific sum of money decreed to the plaintiff by a Colonial Court. In the present case, there was no decree at all in favour of the present plaintiff.

5. The learned Counsel for the respondents contends that on a proper interpretation of the proceedings in the former suit it cannot be said that there was anything like a complete accounts-taking as between all the parties, that at best the Commissioner's report can only be a piece of evidence and that the judgment in that suit ought not to be understood as adjudging that amounts were due to all the parties on the basis of the Commissioner's report. In this connexion, reference was made to the decision in Maneckji Rustomji v. Wadia 1928 Mad. 470, but that related to a stage when the Court had refused to accept the report of the Commissioner. In the present case the Court has in O.S. No. 62 of 1927 passed a decree in favour of the then plaintiff on the basis of the report and it is not possible to see how the Court could have given a decree to that plaintiff for the specific amount arrived at by the Commissioner except by accepting the various items of assets and liabilities, receipts and disbursements and profits and losses, with reference to which the Commissioner fixed the amounts due to the several partners. No doubt the language of the final judgment is not very clear; but seeing that the Court had accepted the objection that the Commissioner should be called upon to determine the amounts due to the other partners in the firm and accordingly sent the case back to the Commissioner for an amended report, it seems only fair to hold that in his final judgment the learned Judge accepted that report as a whole. It is not without significance that even in the present action the contesting defendants have not specified any particular objection to the figures adopted in the Commissioner's report.

6. Respondents' learned Counsel lays stress on the fact that in that report the Commissioner has referred to certain sums as having been drawn by defendant 3 after the close of the partnership but does not fix the amount and he contends that this shows that there was no final adjudication in respect of the amount payable to defendant 3. This is however different from saying that the accounts of the partnership have to be taken over again. The drawings referred to by the Commissioner were not partner's drawings but took place after his death and can at best be taken to be in the nature of part payments to the legal representative of the deceased partner. The considerations above adverted to are material to the question whether the present suit even in respect of the first prayer can be properly regarded as one governed by Article 106. Lim. Act; for it is conceded that if the suit is not governed by Article 106, Lim. Act, it is in time and it is unnecessary to decide whether it will fall under Article 120 or Article 122. In Heveli Shah v. Charan Das 1929 P.C. 184, their Lordships of the Judicial Committee indicate what is the kind of accounts taking that has to be directed in a case of the ordinary accounting kind. Nothing of that kind is required here and we are therefore unable to hold that this suit, in so far as the first prayer in the plaint goes, is governed by Article 106. Respondents therefore insist that the plaintiff has no cause of action to maintain the suit in terms of that prayer.

7. As observed already, there was undoubtedly an amount payable to defendant 3 as representing the share of his brother in the partnership assets and he could, if he chose, have asked for a decree for that amount in the former suit. In these circumstances it does not seem right to say that the plaintiff has no right to make a claim on the basis of what happened in the former suit. The judgment in that suit is fairly capable of being read as declaring the rights of all parties in terms of the Commissioner's report which it adopts. And if limitation based on Article 106 is out of the way, we sea no objection why the plaintiff should not get a decree in this suit for the amount which he claims. The right to sue for enforcement of rights declared in a former judgment or decree is not restricted to cases where the former judgment or decree fixes a definite amount as payable by one party to another. The rights of parties may be declared in various ways : of. Arunachellam Chettiar v. Rajeswara Sethupathi 1925 Mad. 1260. In the present plaint he plaintiff has given credit for the sums that he has received subsequent to the dissolution of the partnership (as noted 'by the Commissioner in the former case) and is claiming only the balance and subject to the investigation of that head, the rights of parties have been declared by the former judgment.

8. It remains to consider the effect of the decision in Dhani Ram Shah v. Bhagirath Shaha (1895) 22 Cal. 692 which is referred to in the judgment under appeal and which was discussed at some length in the argument before us. In that case the partnership had been dissolved on 31st March 1888, and the suit was brought in 1891 but it does not appear whether it was within three years of dissolution or not. Certain other partners had filed suits in 1889 impleading all the partners and in those proceedings the Commissioner appointed by the Court examined the partnership accounts and ascertained the state of accounts of each partner separately. A decree was passed on the basis of the amin's report but only in favour of the thon plaintiffs. In the subsequent litigation of 1891 the plaintiff (who was a defendant in the former suit) purported to sue for the amount which he alleged was due to him as per the Commissioner's former report. The Courts be. low dismissed this suit as barred under Sections 13 and 43 of Act 14 of 1882 and in the High Court Rampini, J., was in favour of that view. Bannerji and Norris, JJ., however, were of a different opinion and remanded the case for decision on the merits. Before the High Court there was also a discussion whether plaintiff might not be permitted to amend the plaint by adding a prayer for an account, if in the judgment of the Court the account prepared in the former suit was not a sufficient basis for a decree in plaintiff's favour. In the arguments before us Mr. Venkatachariar did not rely on the judgment of Rampini, J., but he contended that the other two learned Judges must be understood to have held that plaintiff's proper remedy was if at all to sue for an account, and as no point of limitation was raised in the case, they remanded the suit on that assumption. We are unable to read the judgment of Bannerjee, J, (in which Norris, J., concurred) as supporting the respondents' contention. The two learned Judges no doubt allowed the amendment prayed for but not on the assumption that, that was the only kind of suit maintainable or that without the amendment the suit would have been bad. On p. 708, Bannerjee, J, observed that it is open to question whether a suit for accounts would lie and on p. 710:

Whether those accounts which were prepared (in the former suit) in the presence of all the parties to this suit, can afford a sufficient basis fore decree in favour of the plaintiffs in this suit is a question which has not yet been tried and the plaintiff is certainly entitled to a decision of the Court on that question.

9. On p. 711. he adds:

The taking of an account will be necessary only in the event of the Court deciding that the account prepared in the former suit is not a sufficient basis for a decree.

10. In the circumstances of the present case, we are inclined to accept as correct the proposition contended for, by counsel for appellant in that case, viz. that the adjustment of accounts made by the Commissioner and accepted and acted upon by the Court in a suit for an account of the very same partnership business in which all the partners are parties ought to be held as at least of no less effect than a private award of arbitrators. It seems to us to be reasonably capable of being understood as a judgment declaring the rights of all the parties as per terms of the Commissioner's report. The learned City Civil Judge has based his decision against the plaintiff also on the ground that he has not produced letters of administration to the estate of the deceased Jagarupchand. This objection has not been pressed before us by respondents' learned Counsel. We may point out that in the former suit the present plaintiff was impleaded on the express statement (in para. 8 of the plaint there, Ex. A), that Jagarupchand had left no other heirs except defendant 3, and throughout the proceedings in that suit all the parties proceeded on the footing that defendant 3 would be entitled to whatever may represent) Jagarup's share of the partnership assets. In the present suit while the plaintiff alleges in the plaint that he is he undivided brother of Jagrup, the contesting defendants do not deny that statement but only say that they do not admit that the plaintiff is the sole surviving coparcener. It is not necessary for us now to consider whether other persona may not be entitled to claim rights in any amount which the plaintiff may succeed in getting in this suit. We rest our conclusion in this case on the ground that in O.S. No. 62 of 1927 the Commissioner's report and the final judgment read together recognise certain rights in the plaintiff who was co-nominee a party to that suit. In these circumstances it is unnecessary to discuss the necessity for the production of letters of administration.

11. It has been mentioned above that the Commissioner's report in the former suit, while fixing the amount due to Jagrup's share at Rs. 3,830-7-0 added that dofendant 3 has drawn sums from the partnership firm subsequent to dissolution. In his plaint in this suit, plaintiff gives credit for Rs. 2,160.13-0 for amounts so received and claims only Rs. 1,769-10-0 with interest. On this point also there is no specific statement in the written statement as to what according to the defendants the amounts received by the plaintiff are. But as there is a general statement in para. 12 chat the defendant does not admit the correctness of the amount claimed and as this matter was not finally decided and had not to be decided in the former suit except when the defendants-partners applied for decrees in their favour, the defendants, if they so desired may have the amount of receipts by defendant 3 fixed by the City Civil Court on such evidence as the parties may tender, if that course is adopted, the plaintiff shall have a decree for such balance as may be found due after deducting from the figure fixed by the Commissioner, viz. Rs. 3,830-7-0, the amounts which may be found to have been drawn by the plaintiff. The plaintiff will get; interest on such balance at the rate of 6 per cant per annum from the date of the institution of the present sail. As to costs, we cannot help condemning the remissness of the present plaintiff during the conduct of O.S. No. 62 of 1927. The written statement mentions that the plaintiff has had another opportunity during the pendency of O.S. No. 40 of 1929. If only he had applied on either of those occasions for a decree for such amount as he may be found entitled to, this litigation would have been unnecessary. We are therefore unable to award him costs in this suit so far as the first Court is concerned. But as the first Court had dismissed the suit, he had no alternative but to come up on appeal and we think that he is entitled to the costs of this appeal from the contesting respondents. The decree appealed against is set aside and a decree will issue on the terms above stated. The case will be posted for further orders on 27th March 1934. This case coming on again for further orders the Court made the following.


12. The case will be sent back to the City Civil Court to be disposed of in the light of the observations made in the judgment.

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