Judgment

AYYANGAR, J.: (On behalf of himself and S. K. Das, J.)The principal point that is raised for consideration in this appeal by special leave is as regards the legality and propriety of an order by the learned Single Judge of the High Court of Gujarat directing a counter-claim filed by the respondents to be treated as a plaint in a cross-suit and remanding the case for trial on that basis.

2. The facts necessary to appreciate the points raised before us are briefly as follows: The plaintiff, who is the appellant before us and one Jamnadas Ghelabhai were partners in a business commenced in October 1913 and carried on under the name and style of Bharat Medical Stores at Broach, the two partners having equal shares. During the subsistence of the partnership and from and out of the assets thereof an immovable property-a house was purchased at Broach in July 1932. Jamnadas Ghelabhai died on August 12, 1943 but the partnership business was continued thereafter by the plaintiff-appellant taking in Bai Itcha-the widow of the deceased partner-in his place. A change was, however, made in the shares of the two partners, in that Bai Itcha was given only a 1/4th share as against the 1/2 share enjoyed by her husband. With this alteration the same business was carried on between the two partners. In the early part of 1950 Bai Itcha fell ill. It was the case of the plaintiff that there were negotiations between the two partners as regards the winding up of the firm and it was his further case that on July, 9, 1950 two matters were the subject of a concluded agreement with her. These were: (1) that the partnership would stand dissolved from July 15, 1950 and that Bai Itcha would receive from the plaintiff a sum of Rs. 13,689/- in full satisfaction in respect of the capital contributed by her as well as for the share of the profits of the firm, (2) that the plaintiff was to take over the immovable property in Broach purchased by the firm in July 1932 for its book value and that he should on that account pay over to Bai Itcha Rs. 2,200/9/ being a moiety of the book value. The agreement was stated to be wholly oral and was admittedly not reduced to writing. Before, however, anything was done in pursuance of the alleged arrangement, Bai Itcha died on July 31, 1950 leaving as her heirs the respondents who were the sons of a brother of Jamnadas Ghelabai-Bai Itcha s husband. It was the further case of the appellant that after the death of Bai Itcha respondents 1 and 2 examined the accounts of the partnership and after satisfying themselves that Rs. 13,689/- was the proper figure of the sum due to the deceased partner, agreed to receive the same in full satisfaction of the amount to which they were entitled in respect of that item. All these allegations about the agreement with Bai Itcha and the confirmation by them of the said agreement after her death were, however, denied by the respondents who insisted upon their rights under the law as legal representatives of the deceased partner.

3. The appellant consequently filed a suit in the Court of the Civil Judge at Broach for enforcing the agreement which he alleged and for relief on that basis. It would be necessary to set out and discuss in detail the reliefs claimed in this suit as the same have a material bearing on some of the arguments addressed to us. We shall, however, revert to this after completing the narrative of the proceedings up to the stage of the appeal before us. To this suit the respondents who had been impleaded as defendants filed a Written Statement which was mainly concerned with denying the truth of the agreement with Bai Itcha and the story regarding the subsequent confirmation by themselves and they wound up the statement by a counter-claim which might usefully be extracted even at this stage. In paragraph 25 of the Written Statement they pleaded:

"25. In view of the above facts the plaintiff suit may please be dismissed and the defendants costs may be awarded. The defendants