SUPREME COURT OF INDIA
RUMA PAL, ARUN KUMAR, JJ.
MUKUND BALKRISHNA KULKARNI - APPELLANT
VERSUS
KULKARNI POWDER METALLURGICAL INDUSTRIES AND ANOTHER - RESPONDENTS
CIVIL APPEAL NO. 5268 OF 2004,
DECIDED ON AUGUST 13, 2004
A. Partnership Act, 1932, Section 69(1) - Applicability of- Suit for declaration that Respondent 1 was a partnership business and for dissolution of the firm, accounts and payment of the amount as may be found on the taking of such accounts- Respondent denied existence of partnership business alleging that Respondent 1 was a sole proprietor concern of Respondent 2- Suit decreed by the trial court- First appellate court confirmed said decree- Additional plea of respondent of bar of suit under Section 69 of the Act, rejected, suit being for dissolution of firm covered under Section 69(3)- The High Court held that the suit was barred under Section 69and that there was no partnership in fact- Not proper- decision of the High Court was outside the scope of its jurisdiction under Section 100 of the Code- The High Court could not disturb the finding, without demonstrating that the conclusion was such that it was wholly irrational or was arrived at without taking into consideration matters which were relevant - Order of the High Court set aside.[Paras 5,6 and 7]
B. Partnership Act, 1932, Sections 69(1) and (3) - Bar of suit- Held It was a prayer to be a partner and is therefore not debarred under the provisions of Section 69(1)- Furthermore, suit was for a declaration of the existence of a contract between the parties-That could not be said to be a suit to enforce a right arising from a contract-The second prayer of the appellant was not to continue as a partner of the firm but to dissolve the firm, it was protected under Section 69(3)(a).[Paras 9 and 10]
ORDER
1. LEAVE GRANTED.
2. THE APPELLANT HAD FILED A SUIT AGAINST THE RESPONDENTS STYLED BY HIM AS A "SUIT FOR DISSOLUTION OF PARTNERSHIP FIRM AND ACCOUNTS". IN THE BODY OF THE PLAINT IT WAS CLAIMED BY THE APPELLANT THAT THE PARTIES HAD AGREED TO FORM A PARTNERSHIP IN CONNECTION WITH THE MANUFACTURE OF CERTAIN GOODS. IT WAS THE FURTHER CLAIM OF THE APPELLANT THAT HE HAD IN FACT INVESTED MONIES PURSUANT TO THE AGREEMENT AND HAD TAKEN PART IN THE BUSINESS OF THE FIRM. ON THE ALLEGATION THAT RESPONDENT 2 HAD DENIED THAT THE BUSINESS WAS A PARTNERSHIP BUSINESS, THE SUIT WAS FILED FOR A DECLARATION THAT RESPONDENT 1 WAS A PARTNERSHIP BUSINESS IN WHICH BOTH THE APPELLANT AND RESPONDENT 2 HAD EQUAL SHARES AND PRAYING FOR DISSOLUTION OF THE FIRM, ACCOUNTS AND PAYMENT OF THE AMOUNT AS MAY BE FOUND ON THE TAKING OF SUCH ACCOUNTS. THE SUIT WAS CONTESTED BY THE RESPONDENTS WHO CLAIMED THAT THERE WAS NO PARTNERSHIP AS CLAIMED BY THE APPELLANT, AND THAT RESPONDENT 1 WAS A SOLE PROPRIETOR CONCERN OF RESPONDENT 2. IT WAS ALSO STATED THAT THE APPELLANT HAD MERELY LENT MONEY TO THE BUSINESS, WHICH MONEY HAD BEEN RETURNED TO THE APPELLANT. RELIANCE WAS PLACED IN PARTICULAR ON THE MINUTES OF A MEETING HELD BETWEEN THE PARTIES WHICH WAS SUBSEQUENTLY EXHIBITED AS EXHIBIT 95 IN WHICH IT WAS RECORDED IN THE PRESENCE OF THIRD PARTIES "WE HAVE COME TO THE CONCLUSION THAT PARTNERSHIP CANNOT TAKE PLACE BETWEEN S.B. KULKARNI AND M.B. KULKARNI" (BEING RESPONDENT 2 AND THE APPELLANT RESPECTIVELY).
3. THE TRIAL COURT HELD THAT THE APPELLANT HAD BEEN ABLE TO ESTABLISH THAT THERE WAS A PARTNERSHIP BUSINESS AS CLAIMED BY HIM AND THAT HE WAS ENTITLED TO SUE FOR DISSOLUTION OF THE BUSINESS. ACCORDINGLY, A DECREE WAS PASSED DECLARING THAT RESPONDENT 1 WAS A PARTNERSHIP BUSINESS IN WHICH BOTH THE APPELLANT AND RESPONDENT 2 HAD EQUAL SHARES AND THAT THE FIRM SHOULD BE DISSOLVED WITHIN A PERIOD OF TWO MONTHS. A PRELIMINARY DECREE FOR ACCOUNTS WAS ALSO PASSED.
4. THE FIRST APPELLATE COURT, BY AN EXHAUSTIVE JUDGMENT, RECONSIDERED THE ENTIRE EVIDENCE AND CAME TO THE CONCLUSION THAT THE FINDINGS OF THE TRIAL COURT H WERE CORRECT. BEFORE THE FIRST APPELLATE COURT AN ADDITIONAL ISSUE WAS RAISED BY RESPONDENT 2 VIZ. THAT THE SUIT WAS BARRED UNDER THE PROVISIONS OF SECTION 69 OF THE PARTNERSHIP ACT, 1932. ALTHOUGH THE PLEA WAS ALLOWED TO BE RAISED, IT WAS NEGATIVED BY THE FIRST APPELLATE COURT BY HOLDING THAT THE SUIT WAS IN EFFECT A SUIT FOR DISSOLUTION OF THE PARTNERSHIP FIRM AND AS SUCH MAINTAINABLE A BY REASON OF THE PROVISIONS OF SECTION 69(3) OF THE 1932 ACT.
5. THE HIGH COURT INITIALLY FRAMED TWO QUESTIONS OF LAW IN THE SECOND APPEAL WHICH WAS PREFERRED BY THE RESPONDENTS UNDER SECTION 100 OF THE CODE OF CIVIL PROCEDURE. THESE QUESTIONS WERE:
(1) WHETHER THE FINDING RECORDED BY THE COURTS BELOW THAT THERE WAS ORAL AGREEMENT OF PARTNERSHIP IS PERVERSE AND RESULTS OF NON-CONSIDERATION B OF THE ADMISSIONS OF THE PLAINTIFF?
(2) WHETHER THE COURTS BELOW COMMITTED ERROR OF LAW IN MISINTERPRETING AND MISREADING THE RECEIPT DATED 28-2-1993 AND EXHIBIT 95?
IN ADDITION A FURTHER QUESTION OF LAW, NAMELY, "WHETHER THE SUIT WAS NOT MAINTAINABLE FOR WANT OF REGISTRATION UNDER SECTION 69 OF THE PARTNERSHIP ACT, 1932?" WAS ALSO RAISED.
6. AS FAR AS THE THIRD QUESTION WAS CONCERNED THAT WAS DISPOSED OF FIRST BY HOLDING THAT THE SUIT WAS NOT MAINTAINABLE UNDER SECTION 69. IT WAS ALSO FOUND BY A REAPPRAISAL OF THE EVIDENCE THAT THERE WAS NO PARTNERSHIP IN FACT. AS FAR D AS THE SECOND QUESTION WAS CONCERNED, THE COURT CAME TO THE CONCLUSION THAT THE DOCUMENT DID NOT EVIDENCE THE EXISTENCE OF A PARTNERSHIP AS HAD BEEN FOUND BY THE LOWER COURTS.
7. WE ARE OF THE VIEW THAT THE DECISION OF THE HIGH COURT ON THE FIRST TWO QUESTIONS WERE OUTSIDE THE SCOPE OF ITS JURISDICTION UNDER SECTION 100 OF THE CODE. THE INCLUSION OF THE WORDS "PERVERSE" AND "INTERPRETATION" IN THE E QUESTIONS DID NOT GIVE A LICENCE TO THE HIGH COURT TO IN FACT SIT IN APPEAL AND REAPPRAISE THE ENTIRE EVIDENCE AS IF IT WER
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