High Court of Kerala
Case Details
C.RADHA versus P.VIJAYALAKSHMI
Case Law Search
Indian Supreme Court Cases / Judgements / Legislation
Judgement
C.RADHA v. P.VIJAYALAKSHMI - AS No. 376 of 1993(C) [2007] RD-KL 7501 (11 April 2007)
IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS No. 376 of 1993(C)1. C.RADHA
... Petitioner
Vs
1. P.VIJAYALAKSHMI
... Respondent
For Petitioner :SRI.V.R.VENKATAKRISHNAN (SR.)
For Respondent :SMT.PREETHI KARUNAKARAN
The Hon'ble MR. Justice K.PADMANABHAN NAIR
Dated :11/04/2007
O R D E R
K.Padmanabhan Nair,J.
A.S.Nos.376 of 1993-C & 220 of 1994Dated, this the 11th day of April, 2007
JUDGMENT
These two appeals arise from a common judgment and decree passed in O.S.Nos.120 of 1990 and 34 of 1991 by the Subordinate Judge, Ottapalam. A.S.No.376 of 1993 is filed by the 1st defendant in O.S.No.120 of 1990. A.S.No.220 of 1994 is filed by defendants 1 and 2 in O.S.No.34 of 1991. A.S.No.220 of 1994 was initially filed before the District Court, Palakkad as A.S.No.176 of 1993 and subsequently withdrawn to this Court as both these appeals arise from a common judgment. A.S.No.376 of 1993:
2. This appeal arises from the decree passed by the
Court below in O.S.No.120 of 1990,
by which a decree for
dissolution of the firm 'Anaswara Furniture Company, Mezhathur'
and for division of the
4. The 1st defendant filed a written statement
admitting the formation of the partnership. It was also
admitted
that T.K.Divakaran was the Managing Partner. It was contended
that the accounts were jointly operated with T.K.Divakaran
only
on account of Clause 13 of the partnership deed dated 3.2.1986.
The averment that the firm constructed
four buildings in the
A.S.Nos.376/93 & 220/94
5 -
property let out
by the 1st defendant was denied. It was
contended that the firm constructed only two buildings,
one
workshop building and a shed. It was contended that cattle shed
belonging to the 1st defendant and attached to the
building where
the 1st defendant and family were residing was converted as
office of firm and it was not
a new construction, but a cattle shed
with modification. It was also contended that buildings
constructed
by firm are not the assets of the partnership. It was
contended that all partners of firm had entered into
an
agreement on 3.4.1986 regarding the buildings constructed by
the firm. It was agreed that
firm has a right to occupy the
premises belonging to the 1st defendant only for 10 years and at
the end
of the 10th year, buildings and machinery belonging to
firm will vest with 1st defendant and other
six partners are
entitled to 5% each of the value of machinery purchased by firm.
It was further provided that if
there was default on the part of 1st
defendant in paying 5%, machineries are to be sold in public
auction
and 40% of the amount obtained is to be given to 1st
defendant and balance 60% distributed
equally among other
partners. It was further agreed that if by chance firm was unable
A.S.Nos.376/93 & 220/94
6 -
to complete the 10 years, 1st defendant is entitled to assume
possession of buildings and premises and firm has right to decide
regarding disposal of machineries. It was
contended that
buildings constructed by firm were not the assets of the firm. The
averment that the 1st defendant
started interfering with the
working of the firm was denied. Sri.T.K.Divakaran retired from
the
firm not because of the attitude of 1st defendant, but only
because of personal reasons. There
was no mismanagement or
misappropriation or diversion of funds as alleged. The averment
that 1st defendant
did not permit the Chartered Accountant to
inspect the accounts was also denied. Assets shown in
plant-B
schedule were not the assets of firm. It was contended that from
1987 onwards firm did not purchase any raw material.
The firm
was only collecting charges for manufacturing furniture using the
raw-materials supplied by the customers.
It was further
contended that articles noted in the inventory by Commissioner
were not assets of firm. The raw
materials available in the year
1987 were valued and were taken by Siddique, who was one of
the partners. It was contended
that though he agreed to replace
the raw materials, he failed to do so. Siddique had agreed to
A.S.Nos.376/93
& 220/94
7 -
discharge the loan amount due to Union Bank of India, Pattithara
Branch, but he did not pay any amount. The Bank filed the suit.
When Damodaran retired, he was given an amount
of
Rs.11,000/- as his share out of raw materials and finished goods.
It was also contended that 1st defendant
and her daughter had
advanced huge amounts to firm as loan and they were entitled to
recover it from the firm.
So, she prayed for dismissal of the suit.
5. Defendants 2 and 3 filed a written statement
supporting the case of the plaintiff.
It was contended that
defendants 2 and 3 have no objection for dissolution of
partnership and
directing the 1st defendant to render accounts.
Defendants 2 and 3 are also entitled to get their
share on
dissolution. Assets mentioned in the plaint are assets of firm. 1st
defendant was not entitled to
any special consideration.
Agreement dated 3.4.1986 was not binding on firm and
unenforceable as
it was executed against express terms of
partnership deed. Any agreement entered into by firm
and
strangers can only be in accordance with the provisions of the
deed. Any matter for which
no provision was made in the
partnership deed shall be decided by parties and shall be
A.S.Nos.376/93
& 220/94
8 -
recorded in the minutes book. Agreement dated 3.4.1986 was
not discussed and recorded in the minutes book and as such it
was not binding on firm. All records were
with 1st defendant, who
was the Managing Partner of firm. Minutes book was suppressed
by 1st defendant. It became
impossible to continue the
partnership due to mismanagement and misappropriation by 1st
defendant.
It was also contended that 2nd defendant had
advanced an amount of Rs.51,000/- to firm as per the terms of
the deed and he was entitled to get back that amount with 12%
interest in addition to the share in the assets of firm.
6. The Court below raised the following issues:
7. The plaintiff in O.S.120 of 1990 filed another suit,
O.S.No.34 of 1991 for a declaration and
consequential
A.S.Nos.376/93 & 220/94
9 -
injunction. In the plaint in O.S.No.34
of 1991, it was averred that
plaintiff along with defendants 1, 3, 4 and others formed a
partnership
firm in the year 1986 by name 'Anaswara Furniture
Company' and started functioning. It was for manufacturing and
sale
of furniture. It was averred that for starting unit, firm had
availed a loan from Union Bank of India,
Pattithara. It became
necessary to construct buildings for housing factory, godown,
office, etc.
for establishing the factory. The suit properties
originally belonged to 2nd defendant, husband of 1st defendant.
He
assigned suit properties in favour of 1st defendant who, in turn,
entered into an agreement with other
partners of firm. It was
decided to construct buildings in a plot earmarked by 1st
defendant
for that purpose. A factory building, an office-cum-
godown and two godowns were constructed in that property
and
all the four buildings are the assets of partnership firm. The firm
alone is entitled to those four buildings.
It was averred that
difference of opinion arose between partners and three partners
retired. 1st defendant
became Managing Partner. It was also
averred that since functioning of partnership firm became
impossible, plaintiff filed O.S.No.120 of 1990 for dissolution of
A.S.Nos.376/93 & 220/94
10 -
partnership firm and rendition of accounts and that suit was
pending.
It was contended that buildings bearing door numbers
IX/218, IX/219, IX/220 and IX/221 of Trithala Panchayat
were
constructed by firm. Those buildings were assessed in the name
of 1st defendant in her capacity as
a partner of firm. It was
contended that 1st defendant resides in building bearing door
Nos.IX/217
and IX/217(a) and those buildings were assessed in
the name of 2nd defendant. It was averred that in order to defeat
the
interest of other partners of firm, defendants 1 and 2 tried to
alienate the four buildings and land in which these buildings
are
situated. It was contended that attempt of defendants was to
sell the land and buildings as that
of 2nd defendant. Hence, suit
for a declaration that the land and four buildings situated therein
are assets of
firm and defendants 1 and 2 have no right to
alienate that land or buildings.
8. 2nd defendant alone filed a written statement. It was
contended that suit was not maintainable.
Description of plaint
schedule properties was not correct. It was admitted that 30=
cents of property,
shown as item No.1 in the plaint schedule,
was assigned by 2nd defendant in favour of 1st
defendant on
A.S.Nos.376/93 & 220/94
11 -
12.2.1986. It was contended
that property scheduled in the
plaint was not the property assigned. It was contended that
property shown as item No.2 in plaint schedule was not sold by
2nd defendant to 1st defendant. It was contended
that building
bearing door Nos.IX/218 and IX/221 do not belong to firm and
those buildings are absolute
properties of 2nd defendant. It was
contended that partners of the firm had entered into an
agreement on 3.4.1986 to construct buildings in 30= cents
belonging to 1st defendant. It was further agreed
that duration of
the agreement was ten years and after expiry of ten years,
buildings, machinery, etc.
should vest with 1st defendant and 5%
each of the purchase amount of machineries alone need be paid
to the other
partners. In case 1st defendant is not willing,
machineries can be sold and 40% of the sale consideration should
be given to 1st defendant and remaining 60% to other partners.
In case firm ceased to function before the
expiry of ten year
period or if it was found that it was not possible to continue the
business, land and
buildings can be taken possession by 1st
defendant. It was further contended that the firm become defunct
before
the period of ten years and in view of the provisions
A.S.Nos.376/93 & 220/94
12 -
contained in the agreement dated 3.4.1986, the 1st defendant is
entitled to take possession
of the buildings and land and the
other partners cannot resist the same. The plaintiff was not
entitled to get a decree of injunction. The firm had constructed
one workshop building and one shed.
Two godowns were not
constructed by firm, but by 2nd defendant. It was further
contended that
2nd defendant was not staking any claim for
assets of partnership and he had no intention to
sell assets
belonging to firm and as such plaintiff is not entitled to get any
decree as prayed for and prayed for
dismissal of the suit.
9. The trial Court raised the following issues:
"(1) Whether the suit is not maintainable?
10. Both these suits were jointly tried. Evidence was
recorded in O.S.No.120 of 1990. P.Ws.1 to
8 were examined on
the side of plaintiff and D.W.1 was examined on the side of the
defendant. Exhibits A1 to A26
were proved and marked on the
side of the plaintiff and Exhibits B1 to B40 on the side of
the
defendants. Exhibits C1 to C9 were marked as Court Exhibits.
Exhibits X1 to X6 were also
marked. After appreciating the
evidence on record, the trial Court passed a preliminary decree in
O.S.No.120 of
1990. In O.S.No.34 of 1991, a decree was passed
declaring that four buildings standing in plaint schedule property
belonged
to firm. Defendants 1 and 2 were restrained by a
A.S.Nos.376/93 & 220/94
14 -
decree of prohibitory injunction from alienating the plaint
schedule item No.1 till realisation
of shares of plaintiff and other
supporting defendants after passing a final decree in O.S.No.120
of 1990. Challenging
the decree and judgment passed in O.S.120
of 1990, A.S.No.376 of 1993 is filed. A.S.No.220 of 1994 is filed
challenging
the decree and judgment in O.S.No.34 of 1991.
11. In O.S.No.120 of 1990, the plaintiff had impleaded
three partners of the firm as defendants 1 to 3. In O.S.No.34
of
1991, husband of 1st defendant in O.S.No.120 of 1990 was
arrayed as 2nd defendant. Defendants
2 and 3 in O.S.No.120 of
1990 were arrayed as defendants 3 and 4.
12. Learned counsel appearing for appellants
strenuously argued before me that finding of the Court below
that
four buildings standing in the property of appellants in
A.S.No.220 of 1994 are assets of the firm
is wrong and against
the documentary evidence available on record. It is argued that
learned Sub Judge failed to
appreciate evidentiary value of
Exhibit B1 dated 3.4.1986 and had that document been properly
construed, there
was no scope for any decree being passed in
O.S.No.34 of 1991 against the appellants. It was also contended
A.S.Nos.376/93 & 220/94
15 -
that in the preliminary decree passed in O.S.No.120
of 1990 for
dissolution of firm and rendition of accounts, Court below had
already considered what are
the assets and liabilities of firm and
thereby limited the scope of final decree proceedings.
13. The main point arising for consideration in
A.S.No.220 of 1994 is whether finding
of the Court below that
four buildings were constructed by the Anaswara Furniture
Company and those
are assets of firm is correct. Admittedly on
3.2.1986 Exhibit A1 partnership was entered into between
parties.
There were seven partners. In addition to the plaintiff
and defendants 1 to 3 in O.S.No.120 of 1990, there
were three
more partners. They were S/Shri.T.K.Divakaran, K.M.Madhavan
and A.Damodaran. Damodaran retired on
25.12.1987, Madhavan
on 1.6.1988 and Divakaran on 12.6.1988. After forming
partnership, partners of firm
executed Exhibit B1 agreement. In
paragraph 2 of the plaint filed in O.S.No.120 of 1990, there was
an averment to
the effect that firm had entered into a lease
arrangement with 1st defendant and 1st defendant let out property
belonging to her and in that property four buildings were
constructed. The appellants in A.S.No.220 of
1994 had not stated
A.S.Nos.376/93 & 220/94
16 -
as to what exactly was the
nature of the agreement entered into
between herself and the other partners of firm under Exhibit B1.
It is admitted by
defendants 1 and 2 in O.S.No.34 of 1991 that
property comprised in R.S.No.113/4 originally belonged to 2nd
defendant and he assigned that property to 1st defendant on
12.2.1986. In Exhibit B1 it was agreed
that firm can construct
buildings in the property. There is no mention as to how many
buildings
are to be constructed. It was also stated that such
buildings can be used only for running
business of firm and it
cannot be used for any other purpose. Period of agreement was
limited to ten years. It
was further stated that on the expiry of
ten years, the title of land and the buildings constructed by the
firm and also
the machineries erected in those buildings will vest
with the 1st defendant. It was further admitted that at that point
of time, she shall pay 5% of the purchase price of machinery to
each of the partners and in case she commits
default,
machineries are to be sold and 40% of the sale consideration will
be given to her and remaining 60% will be
divided among other
partners. The relevant portion of the agreement reads as follows:
A.S.Nos.376/93 & 220/94
17 -
It was further stated that if firm want to occupy premises beyond
the period
of ten years, a fresh agreement is to be executed. But,
without the permission of 1st defendant, firm cannot continue to
do business in the land and 1st defendant has a right to recover
the property and buildings. The relevant portion
reads as
follows:-
It was further provided that in case the firm is wound up or it
becomes impossible to continue the business, 1st defendant can
recover the land and buildings and if such a contingency
arises,
A.S.Nos.376/93 & 220/94
18 -
the firm will have the right to decide as
to what should be done
with the machinery. The clause reads as follows:
The appellants contended that only
two of the buildings were
constructed by firm and remaining two buildings were old
buildings
constructed by 2nd appellant in A.S.220 of 1994 in his
property. It was also contended that these buildings are not the
assets of the firm in view of the provisions contained in Ext.B1.
14. Learned counsel appearing for the appellants has
strenuously argued before me that in
view of specific provision
contained in Exhibit B1 that title of land and buildings vest with
1st defendant, finding
of the Court below that it is an asset of firm
is wrong and illegal.
A.S.Nos.376/93 & 220/94
19 -
15. In Exhibit B1 no schedule, no measurements and
no boundaries of the property assigned are stated. It was stated
that area of land assigned is 30= cents. Appellants admit that
buildings bearing door Nos.IX/219 and
IX/220 were constructed
by firm. According to them, buildings bearing door Nos.IX/218
and IX/221 were
constructed by 2nd appellant in A.S.No.220 of
1994. The evidence on record shows that construction
of the
building started even prior to the execution of Exhibit B1 and on
the date of execution of Exhibit B1, construction
of buildings were
nearing completion. Building bearing door No.IX/219 was used as
factory, door No.IX/218 was office-cum-godown
and door
Nos.IX/220 and IX/221 were godowns. Exhibit A3 account was
written by D.W.1 in his own handwriting.
It shows that
preliminary work of construction started as early as in November,
1985. Though it was contended
that buildings were constructed
using the materials of old building, the same was not proved.
Exhibit
C7 is the accounts of the firm which shows that on
30.3.1986 an amount of Rs.14,280/- was spent for construction.
Exhibit C7 shows that value of the buildings was Rs.1,71,354.40
as on 31.3.1987. Exhibit X2 is a file in relation to the
firm kept in
A.S.Nos.376/93 & 220/94
20 -
the office of the Executive
Engineer, Buildings Division, P.W.D.,
Palakkad. The firm claimed subsidy and other benefits and for
that purpose, assets of firm were valued. The P.W.D. had valued
the four buildings bearing door Nos.9/192A, B and C constructed
in April, 1986 and 9/220 constructed in April, 1987. Exhibit X2
file contains two certificates
issued by the Executive Officer of
Trithala Panchayat, which shows that building bearing door
Nos.9/192A, B, C and 9/220 are owned by the 1st defendant in
her capacity as Managing Partner of firm.
It also shows that
building bearing door Nos.9/192 is a residential building
belonging to D.W.1.
Exhibit X2 also contains a sketch showing
the location of four buildings belonging to firm. That
was
prepared by the Assistant Engineer, P.W.D. Buildings Division and
countersigned by Assistant Executive Engineer,
P.W.D. Exhibit C2
is a file maintained by the District Industries Centre, Palakkad in
respect of the firm. The certificate
of registration shows that the
location of the factory is in building No.9/192A, B and C of
Trithala
Panchayat. The value of the buildings fixed therein was
Rs.1,71,354.50. It is to be noted that same was the value of the
building as per Exhibit C7 records. Exhibit A25 is a true copy of
A.S.Nos.376/93 & 220/94
21 -
the Panchayat Building Tax Assessment Register. It shows that
buildings bearing
door No.9/217 and 9/217A are owned by
Gopalan Nair, 2nd appellant in A.S.No.220 of 1994. Buildings
bearing door Nos.218, 219, 220 and 221 are assessed in the
name of C.Radha, Anaswara Furniture Company.
Building bearing
door No.217A is assessed in the name of Suresh, the son of the
appellants. Exhibits A2 to A4 are demand
notices of building tax
of the four buildings. It was issued to C.Radha, partner of the
firm. Exhibit
C3 report and Exhibit C6 plan show that only two of
the buildings were constructed within the 30= cents mentioned
in
Exhibit B1 and other two buildings were constructed in the
property owned by 2nd appellant in A.S.No.220
of 1994. Going by
terms of Exhibit B1, permission granted was to construct
buildings required for
firm in property mentioned in that
document. But, the evidence on record will show that two of the
buildings
are situated outside the property mentioned in Exhibit
B1. As I have already stated, defendants-appellants had admitted
that two of the buildings were constructed by firm. Their case
that the other two buildings
belong to the 2nd appellant in
A.S.No.220 of 1994 is not established. On the other hand, the
A.S.Nos.376/93 & 220/94
22 -
materials on record prove beyond any reasonable
doubt that all
four buildings were constructed by firm. D.W.1 is 2nd appellant in
A.S.No.220 of 1994. The materials
on record show that he was
looking after the affairs of the firm. So, appellants were aware of
the fact that two
of the buildings constructed by firm were not
within the property covered by Exhibit B1 and it was constructed
outside that property. The finding of the trial Court that the four
buildings were constructed by the firm
is perfectly correct and
does not call for any interference. I confirm that finding.
16. The next question that arises for consideration is
whether the four buildings can be treated as assets
of the firm.
The trial Court had found that those buildings are asset of the
firm, but the land does
not belong to the firm. Even in Exhibit B1
agreement no land was assigned in favour of the firm. Firm was
given permission
to construct necessary buildings in the land.
Exhibit C7 account shows that the firm had spent Rs.1,71,354.40
for construction of the four buildings. That was corroborated by
the materials contained in Exhibit X2
file also. The Department
had also fixed the value of the buildings as Rs.1,71,354.40.
Exhibit
A10 is an interim profit and loss account for the period
A.S.Nos.376/93 & 220/94
23 -
ended 31st May, 1988 prepared at the time of retirement of
Sri.Madhavan.
It shows that the value of the buildings was fixed
as Rs.1,38,797/- and after giving depreciation of 10% for
two
months, the value was fixed at Rs.1,36,484/-. Madhavan was
given share of profits taking
into account of the value of the
buildings also. This was not objected to by the 1st defendant, who
was
a partner. So, she, as partner, had admitted that the
buildings belong to the firm and the value of the same
will come
as fixed in Exhibit A10. So, the finding of Court below that four
buildings are the assets of the firm is correct
and I confirm that
finding.
17. The next question arising for consideration is
whether the defendants 1 and 2 in O.S.No.34 of
1991 are entitled
to take possession of the land and buildings without paying any
compensation. The learned counsel appearing
for the appellants
has strenuously contended before me that the finding of the
Court below that if it
is found that the buildings will vest with the
1st defendant, it will cause unforeseen loss and hardship to other
partners
is against the evidence on record. It is argued that the
parties on their own accord had entered into Exhibit
B1
A.S.Nos.376/93 & 220/94
24 -
agreement by which they had solemnly undertaken
to surrender
the land and buildings free of cost in case the business is wound
up before the expiry of ten
year period. The learned counsel
appearing for the 1st respondent-plaintiff had contended that the
defendants
3 and 4 in O.S.No.34 of 1991 had raised a contention
in O.S.120 of 1990 to the effect that Exhibit B1 is inoperative and
not binding on the partners. It was contended that Clause 25 of
the original partnership deed provides that all matters for
which
no provision is made in the original partnership deed shall be
decided by the partners and shall
be recorded in a minutes book.
It was contended that clauses of Exhibit B1 agreement were
never discussed
by partners and recorded in minutes book and as
such there is violation of clause 25 of the partnership deed and
hence
it is not binding on firm. It is also argued that a reading of
Exhibit B1 shows that other partners had agreed to surrender
the
buildings without receiving any compensation only in case the
firm is doing business for the full term
of ten years. It is argued
that even though no rent was fixed, D.W.1 had admitted that if
the land covered by Exhibit
B1 was leased out, it would fetch a
rent of minimum Rs.700/- per mensem. It is argued that if firm
A.S.Nos.376/93 & 220/94
25 -
occupies the land for ten years, the probable rent for that period
will be
a sufficient compensation for the buildings and that is the
reason why parties had undertaken to hand over the buildings to
1st defendant without receiving any compensation after the expiry
of ten years. It is argued that though parties had agreed
that the
1st appellant in A.S.No.220 of 1994 can recover the building,
there was no understanding to the
effect that she need not pay
the value of the building. It is contended that a perusal of Exhibit
A10 will show that when
Madhavan retired, the 1st defendant also
agreed to treat the value of the buildings as asset of the firm and
gave a share
to Madhavan. Hence, it is argued that 1st defendant
is estopped from raising a contention that she is entitled
to
recover the buildings without paying any compensation.
18. Exhibit A1 is the deed of partnership. Exhibit B1 is
an agreement entered into between the partners by which
the 1st
defendant allowed the firm to erect buildings in the property
covered by Exhibit B1.
The evidence on record shows that the
firm owns four buildings. Two of the buildings situate in
that
property and two other buildings outside that area. No rent was
fixed under Exhibit B1. There is dispute regarding
the nature of
A.S.Nos.376/93 & 220/94
26 -
the transaction also. Exhibit B1 contains
the word " ",
which means that 'for rent'. But, according to the counsel for the
plaintiff,
that was a subsequent interpolation and in the draft
prepared will make it clear that there was no such understanding.
In the plaint filed in O.S.No.120 of 1990 there was an admission
to the effect that land was taken on rent by firm. It
is argued that
understanding was to the effect that if firm had occupied the
building for ten years,
the buildings and machineries will be given
to the 1st defendant in lieu of consideration of using the land. But,
even
in that case she had agreed to pay 5% of the purchase
value of the machineries to each of the six partners.
It is further
provided that in case she fails to pay that amount, the
machineries are to be sold and
she is entitled to get 40% of the
sale consideration and balance 60% to remaining partners. It is
true that there
is yet another clause in Exhibit B1 agreement,
which says that if the firm was wound up before the expiry of
ten
year period or it is impossible to conduct the business before the
expiry of the term, 1st defendant can take possession
of the land
and building. Exhibit B1 is silent whether in such a contingency
the appellants are liable to pay
the value of the buildings or not.
A.S.Nos.376/93 & 220/94
27 -
It is
also to be noted that there is difference in the mode of
taking over of the land and buildings before
and after the period.
If it is after ten years 1st appellant can recover land and buildings
on the strength of
her title, but if it is before ten years, the
agreement only says that she can recover the land and buildings.
It is argued that such recovery can be only through a Court of
law. Whether the appellants can take possession
of the buildings
without payment of compensation is the moot question to be
decided.
19. I am of the view that that question does not arise
for consideration in this case. Even assuming that the
partnership
had functioned for ten years and thereafter the 1st defendant
wanted to terminate the relationship,
it is doubtful whether she
can enter into the land and reduce the land and buildings into her
possession. Any way,
that question does not arise in this case.
The appellants in A.S.No.220 of 1994 cannot take law into their
hands and for forcibly take possession of the buildings. They can
take possession of the land and buildings
only through due
process of law. They will have to approach a competent Court of
law for getting possession
of land and buildings. In that
A.S.Nos.376/93 & 220/94
28 -
proceedings
what exactly is the relationship between the 1st
appellant and other partners will have to be
decided. The
question whether the appellants are liable to pay value of the
buildings, etc. is
also a matter to be decided in that proceedings.
There is no counter-claim or cross suit claiming possession of the
buildings
and land. That question need not be considered in this
proceedings. So the finding of the Court below that the appellant
are liable to pay the value of the buildings is left open to be
decided in appropriate proceedings.
20. The trial Court passed a decree of injunction
restraining the defendants 1 and 2 from alienating
the property
till a final decree in O.S.120 of 1990 is passed. I do not think, it
is just and proper to wait
till the dispute between the partners
inter se is settled. It is true that the 1st appellant
is also a
partner of the firm, but 2nd appellant is not a partner. So, the
decree of injunction
is to be limited by holding that the firm is
entitled to be in possession of the buildings
and property until
and unless the firm and its partners are duly evicted under due
process of law. So, the decree
passed in O.S.No.34 of 1991 is to
be modified accordingly.
A.S.Nos.376/93 & 220/94
29 -
21. In A.S.No.376 of 1993, the trial Court has passed
a preliminary decree for dissolution of the partnership.
Originally
there were seven partners. Three of them had already retired.
The stand taken by the partners
in O.S.No.120 of 1990 makes it
evidently clear that it is not possible for the firm to continue the
business. There is
no trust or faith among the partners. They are
making allegations and counter allegations. So, it is absolutely
necessary to dissolve the partnership. So, the preliminary decree
passed by the trial Court dissolving the firm is correct
and only to
be confirmed.
22. The learned counsel appearing for the appellant
has argued that the decree passed
by the trial Court in
O.S.No.120 of 1990 by which it directed not to take into account
of the amount due to 1st
appellant and her daughter and also to
include the articles mentioned in the inventory list is not correct.
It is
argued that more than Rs.25,000/- with interest is due to
the daughter of the appellants and that is clear from
the accounts
book. The trial Court found that the 2nd defendant had made a
claim that he had advanced
an amount of Rs.51,000/- to the firm
and that claim is not disputed by anybody. While dealing with the
A.S.Nos.376/93
& 220/94
30 -
connected appeal, I had found that assets of the firm includes the
value of the four buildings constructed by the firm in the property
of defendants 1 and 2 in O.S.No.34 of 1991 and that
value shall
also to be added as asset of the firm. There is dispute regarding
the amount claimed by the 1st defendant
and also the liability to
account the raw materials, semi-finished goods, finished goods,
etc. According to me,
the Court below ought to have directed the
1st defendant to furnish the accounts and permitted any of the
parties to apply for passing a final decree after taking into
account of the assets and liabilities.
A perusal of the decretal
portion of O.S.120 of 1990 shows that there was no direction to
the plaintiff or other
contesting defendants to apply for passing a
final decree. Since the proper time for considering the assets and
liabilities
of the firm is at the time of passing of the final decree, I
am of the view that two disputed findings, that is to say -
one
regarding the amount which according to the 1st defendant is due
to her daughter and also the direction
to include the articles
mentioned in the inventory list, etc. - are left open to be decided
in the final
decree proceedings. So, those findings are also set
aside. I make it clear that those findings
are set aside not on
A.S.Nos.376/93 & 220/94
31 -
account of the
fact that the reasoning given by the trial Court is
wrong, but only on the fact that it is a matter to be decided at
the
time of passing of the final decree. Since it was necessary to
decide the ownership and value of the four buildings for passing
a
decree in O.S.No.34 of 1991, that finding will be incorporated in
O.S.No.120 of 1990 as one of the assets of the firm.
There was
no dispute with regard to the amount due to the 2nd defendant.
That amount is to be included in
the liabilities of the firm. The
other two findings regarding the claim by the 1st defendant for an
amount
of Rs.25,000/- to her daughter and also the decree to
include the items mentioned in inventory list are
only to be set
aside. It is made clear that is open to the trial Court to come to
the same conclusion in case
the evidence warrants such a
conclusion.
In the result, the appeals are allowed in
part. The
declaratory part of the decree passed in O.S.No.34 of 1991 is
confirmed. The injunction
decree is modified. Defendants 1 and 2
in O.S.No.34 of 1991 are restrained by a decree of prohibitory
injunction from forcibly evicting the firm and its partners until
and unless the firm is evicted from the
buildings and land under
A.S.Nos.376/93 & 220/94
32 -
due process of law. The
preliminary decree passed in O.S.No.120
of 1990 for dissolution of the partnership is confirmed. 1st
defendant shall render accounts. It is open to any one of the
parties to apply for appointment of a
Commissioner to examine
the accounts and also to prepare the assets and liabilities of the
firm so as to enable the trial
Court to pass a final decree. While
fixing the assets, the value of the four buildings shall be treated
as the assets of
the firm and amounts due to the 2nd defendant
in O.S.No.120 of 1990 shall be shown as one of the liabilities. No
costs.
C.M.P.No.2075 of 1993 in A.S.No.376 of 1993 shall stand
dismissed.
K.Padmanabhan Nair
Judge
vku/-
"(1) What are the assets belonging to the firm?
(2) What are the liabilities of the firm?
(3) Whether
the first defendant is liable to render accounts?
(4) What is the proper order as to costs?"
A.S.No.220 of
1994
(2) Whether the description, measurements and
boundaries of item No.1 as shown in the
plaint
is correct?
(3) Whether the plaintiff is entitled to get a decree
for
declaration as prayed for?
(4) Whether the plaintiff is entitled to get a decree
for perpetual
injunction as prayed for?
(5) Whether the Anaswara Furniture Company has
any right or possession
over the four buildings
inclusive of Nos.9/218 and 9/221 as mentioned
A.S.Nos.376/93 & 220/94
13 -
in the plaint?
(6) Whether the agreement executed
on 3.4.1986
as alleged in the written statement of the
second defendant is true and binding
upon the
plaintiff?
(7) Whether the cause of action as alleged is true
and actionable?
(8) Whether the plaintiff is entitled to any relief as
prayed for?
(9) What is the proper order as to costs?".
Copyright
Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites
Advertisement
dwi Attorney | dui attorney | dwi | dui | austin attorney | san diego attorney | houston attorney | california attorney | washington attorney | minnesota attorney | dallas attorney | alaska attorney | los angeles attorney | dwi | dui | colorado attorney | new york attorney | new jersey attorney | san francisco attorney | seattle attorney | florida attorney | attorney | london lawyer | lawyer michigan | law firm |
Tip:
Double Click on any word for its dictionary meaning or to get reference material on it.
Tip:
Double Click on any word for its dictionary meaning or to get reference material on it.