A deceased partner's representative is entitled to their share of partnership assets free from debts incurred after dissolution, unless such debts were for winding up the business or creditors reasonably believed they were for that purpose.

Judgement

Consolidated Appeals (Nos. 101 to 106 of 1932) from six decrees of the High Court in its appellate jurisdiction (April 1, 1931) reversing and varying six decrees of the High Court in its original jurisdiction bearing different dates.

The consolidated appeals, in each of which Babu alias Govindoss Krishnadoss was the appellant, raised two main questions—namely, (1.) whether a firm, which traded in Madras from 1890 to 1924 under the name Mulidoss Ramdoss & Co., and at the date of the litigation was in liquidation, was a joint Hindu family trading business or a partnership firm ; and if the latter, (2.) whether the appellant, as representative of his father Krishnadoss, who was a member of the firm until his death in 1908, was entitled to his fathers share in the assets of the partnership free from debts, secured and unsecured, contracted by the firm long after 1908.

The facts are stated in the judgment of the Judicial Committee.

The six suits to which the present consolidated appeal related were tried together by Venkatasubba Rao J. The learned judge held that the partition award of 1890 effected a complete partition between all five brothers, and that subsequent conduct was not admissible to show the contrary; a reunion between the two elder brothers was legally possible, as each had a minor son, but on the evidence no reunion was established. In his view, therefore, the business was a partnership business, and as the debts in question, whether secured or unsecured, had not been incurred for the purpose of winding up the partnership, they were not chargeable against the share of the appellants father.

Appeals were heard by Ramesam and Stone JJ., and were allowed. Ramesam J. said that the document of 1890, which was not a deed of partition but an award, was peculiar in that it allotted the business without a division between the brothers. In determining the effect upon the rights of persons not parties to it he thought that the subsequent conduct of the parties could be considered. After examining the evidence the learned judge said that, in his opinion, by November, 1907, or probably earlier, " the branches of Muralidoss and Govardandoss made up their minds to be a joint family and declared themselves to be so, their conduct being consistent with either that they reunited in 1906 or continued in union from 1890." Even apart from reunion or continuance of union, but upon the basis of partnership, the present appellant was not entitled to relief. Having referred to ss. 240, 241, 262 and 263 of the Indian Contract Act, 1872, and to certain English decisions, the learned judge said that the creditors were entitled to assume that the debts incurred to them were for the purpose of carrying on the business, and that the present appellant was not entitled to priority over charges given for such debts. He was further of opinion that in the absence of the evidence of the appellants mother, the appellant was to be deemed to have been admitted to the benefits of the partnership within s. 247 of the Act, and that he was therefore liable in respect of the debts incurred in carrying it on. Stone J. delivered a separate but concurring judgment.

1934. Feb. 26, 27; Mar. 1, 2, 5, 6. De Gruyther K.C. and Hyam for the appellant. The award of 1890 effected a complete partition between the five brothers, and its effect cannot be altered by the subsequent conduct of the parties Balkishen Das v. Ram Narain Sahu . (( 1903) L. R. 30 I, A. 139.) The burden of proving a reunion was upon those who asserted it Balabux Ladhuram v. Rukhmabai . (( 1903) L. R. 30 I. A. 130.) That burden was not discharged. After the award the two brothers referred to themselves as partners in several documents; the accounts were regarded by both Courts below as inconclusive. On the basis that the business was a partnership business, the appellant was entitled under the Indian Contract Act, 1872, s. 253, sub-s. 10, and s. 263 to his fathers share in the assets at the d